On August 23, 2019, Horizons ETFs Management (Canada) Inc. ("Horizons") issued a press release announcing a proposed corporate class reorganization of a number of its existing ETFs. The full press release is available by clicking here.

On June 23rd, 2020, Horizons issued a press release announcing the corporate class reorganization of the Horizons Absolute Return Global Currency ETF and the Horizons Morningstar Hedge Fund Index ETF. The full press release is available by clicking here.

On July 16th, 2020, Horizons issued a press release announcing the corporate class reorganization of the Horizons Global Risk Parity ETF. The full press release is available by clicking here.

On July 30th, 2020, Horizons issued a press release announcing the successful corporate class reorganization of the Horizons Global Risk Parity ETF into the Horizons ReSolve Adaptive Asset Allocation ETF, a new class of shares of Horizons ETF Corp. The full press release is available by clicking here.

This web resource page can be used to learn about the conversion process as well as allow unit holders to access information to help them to make a specific tax election if they held the units of the ETFs during the conversion.

Some of the key resources available to unit holders on how the conversion process works include the following:

The following Management Information Circulars each provide a comprehensive review of the material on which unitholders voted, and the conversion process and implications.
https://www.horizonsetfs.com/horizons/media/pdfs/corporateclass/Circular_FR.pdf (French)

The Notice and Access document for each ETF or group of ETFs, that were sent to unitholders:

An investor-friendly frequently asked questions (FAQ) document on the conversions as it was proposed:

A summary of the ETFs that merged and their respective net asset value per unit / share on the date of the transaction:

Section 85 Elections

The reorganizations are not expected to be taxable events for Canadian resident unitholders of the ETFs provided that such unitholders who hold units of the ETFs in taxable accounts make a joint election with the mutual fund corporation under Section 85 of the Income Tax Act as part of the exchange from their trust units into shares of a series of the new mutual fund corporation.

Investors who wish make a joint election with Horizons must complete the documentation on their own behalf, submit those forms to Horizons for us to complete, and then when we send back completed and signed copies to the investor, they must submit copies to the relevant tax authorities.

The Canada Revenue Agency forms may be found through the following links:

T2057 – which is for individuals, trusts, and corporations: 

T2058 – which is for use by Partnerships:

Publications relevant to the joint tax election may be found at:

For Quebec residents/taxpayers, in addition to the above federal forms, please see the following:

The following are the links for the joint tax election forms on the Revenu Quebec website:

TP-518(-V) – Transfer of Property by a Taxpayer to a Taxable Canadian Corporation
EN: https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/tp-518-v/
FR: https://www.revenuquebec.ca/fr/services-en-ligne/formulaires-et-publications/details-courant/tp-518/

TP-529(-V) – Transfer of Property by a Partnership to a Taxable Canadian Corporation
EN: https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/tp-529-v/
FR: https://www.revenuquebec.ca/fr/services-en-ligne/formulaires-et-publications/details-courant/tp-529/


Tips For Completing the Required CRA Forms


The information contained in this section reflects general tax information only and does not constitute, and should not be construed as, tax advice. Investor’s situations may differ, and investors should consult with their tax advisors before making any decisions. The information provided herein is provided as is and Horizons makes no warranty as to the accuracy of the information, and may not update the information as updates become available. Any documents submitted to Horizons will be responded to on a best efforts basis only, and Horizons bears no responsibility for the accuracy of such documents or for the timeliness of such documents or for the timeliness of any response to any such documents submitted to Horizons.

Share This Article

This website uses cookies to ensure we give you the best experience. By continuing to browse the site, you are agreeing to our use of cookies. Click here to read our privacy policy.

Commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by Horizons ETFs Management (Canada) Inc. (the "Horizons Exchange Traded Products"). The Horizons Exchange Traded Products are not guaranteed, their value changes frequently and past performance may not be repeated. Certain ETFs may have exposure to leveraged investment techniques that magnify gains and losses and which may result in greater volatility in value and could be subject to aggressive investment risk and price volatility risk. Such risks are described in the prospectus. The prospectus contains important detailed information about the ETF. Please read the relevant prospectus before investing.

The Horizons Exchange Traded Products include our BetaPro products (the “BetaPro Products”). The BetaPro Products are alternative mutual funds within the meaning of National Instrument 81-102 Investment Funds, and are permitted to use strategies generally prohibited by conventional mutual funds: the ability to invest more than 10% of their net asset value in securities of a single issuer, to employ leverage, and engage in short selling to a greater extent than is permitted in conventional mutual funds. While these strategies will only be used in accordance with the investment objectives and strategies of the BetaPro Products, during certain market conditions they may accelerate the risk that an investment in shares of a BetaPro Product decreases in value. The BetaPro Products consist of our Daily Bull and Daily Bear ETFs (“Leveraged and Inverse Leveraged ETFs”), Inverse ETFs (“Inverse ETFs”) and our BetaPro S&P 500 VIX Short-Term Futures™ ETF (the “VIX ETF”). Included in the Leveraged and Inverse Leveraged ETFs and the Inverse ETFs are the BetaPro Marijuana Companies 2x Daily Bull ETF (“HMJU”) and BetaPro Marijuana Companies Inverse ETF (“HMJI”), which track the North American MOC Marijuana Index (NTR) and North American MOC Marijuana Index (TR), respectively. The Leveraged and Inverse Leveraged ETFs and certain other BetaPro Products use leveraged investment techniques that can magnify gains and losses and may result in greater volatility of returns. These BetaPro Products are subject to leverage risk and may be subject to aggressive investment risk and price volatility risk, among other risks, which are described in their respective prospectuses. Each Leveraged and Inverse Leveraged ETF seeks a return, before fees and expenses, that is either up to, or equal to, either 200% or –200% of the performance of a specified underlying index, commodity futures index or benchmark (the “Target”) for a single day. Each Inverse ETF seeks a return that is –100% of the performance of its Target. Due to the compounding of daily returns a Leveraged and Inverse Leveraged ETF’s or Inverse ETF’s returns over periods other than one day will likely differ in amount and, particularly in the case of the Leveraged and Inverse Leveraged ETFs, possibly direction from the performance of their respective Target(s) for the same period. For certain Leveraged and Inverse Leveraged ETFs that seek up to 200% or up to or -200% leveraged exposure, the Manager anticipates, under normal market conditions, managing the leverage ratio as close to two times (200%) as practicable however, the Manager may, at its sole discretion, change the leverage ratio based on its assessment of the current market conditions and negotiations with the respective ETF’s counterparties at that time. Hedging costs charged to BetaPro Products reduce the value of the forward price payable to that ETF. Due to the high cost of borrowing the securities of marijuana companies in particular, the hedging costs charged to HMJI are expected to be material and are expected to materially reduce the returns of HMJI to unitholders and materially impair the ability of HMJI to meet its investment objectives. Currently, the manager expects the hedging costs to be charged to HMJI and borne by unitholders will be between 10.00% and 45.00% per annum of the aggregate notional exposure of HMJI’s forward documents. The hedging costs may increase above this range. The manager publishes on its website, the updated monthly fixed hedging cost for HMJI for the upcoming month as negotiated with the counterparty to the forward documents, based on the then current market conditions. The VIX ETF, which is a 1x ETF, as described in the prospectus, is a speculative investment tool that is not a conventional investment. The VIX ETF’s Target is highly volatile. As a result, the VIX ETF is not intended as a stand-alone long-term investment. Historically, the VIX ETF’s Target has tended to revert to a historical mean. As a result, the performance of the VIX ETF’s Target is expected to be negative over the longer term and neither the VIX ETF nor its target is expected to have positive long-term performance. BetaPro Bitcoin ETF (“HBIT”), and BetaPro Inverse Bitcoin ETF (“BITI”), which are a 1X ETF, and an up to -1X ETF, respectively, as described in the prospectus, are speculative investment tools that are not conventional investments. Their Target, an index which replicates exposure to rolling Bitcoin Futures and not the spot price of Bitcoin, is highly volatile. As a result, neither ETF is intended as a stand-alone investment. There are inherent risks associated with products linked to crypto-assets, including Bitcoin Futures. While Bitcoin Futures are traded on a regulated exchange and cleared by regulated central counterparties, direct or indirect exposure to the high level of risk of Bitcoin Futures will not be suitable for all types of investors. An investment in any of the BetaPro Products is not intended as a complete investment program and is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment. Please read the full risk disclosure in the prospectus before investing. Investors should monitor their holdings in BetaPro Products and their performance at least as frequently as daily to ensure such investment(s) remain consistent with their investment strategies.

Horizons Total Return Index ETFs (“Horizons TRI ETFs”) are generally index-tracking ETFs that use an innovative investment structure known as a Total Return Swap to deliver index returns in a low-cost and tax-efficient manner. Unlike a physical replication ETF that typically purchases the securities found in the relevant index in the same proportions as the index, most Horizons TRI ETFs use a synthetic structure that never buys the securities of an index directly. Instead, the ETF receives the total return of the index through entering into a Total Return Swap agreement with one or more counterparties, typically large financial institutions, which will provide the ETF with the total return of the index in exchange for the interest earned on the cash held by the ETF. Any distributions which are paid by the index constituents are reflected automatically in the net asset value (NAV) of the ETF. As a result, the Horizons TRI ETF receives the total return of the index (before fees), which is reflected in the ETF’s share price, and investors are not expected to receive any taxable distributions. Certain Horizons TRI ETFs (Horizons Nasdaq-100 ® Index ETF and Horizons US Large Cap Index ETF) use physical replication instead of a total return swap. The Horizons Cash Maximizer ETF and Horizons USD Cash Maximizer ETF use cash accounts and do not track an index but rather a compounding rate of interest paid on the cash deposits that can change over time.

*The indicated rates of return are the historical annual compounded total returns including changes in per unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The rates of return shown in the table are not intended to reflect future values of the ETF or returns on investment in the ETF. Only the returns for periods of one year or greater are annualized returns.