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Horizons ETFs Management (Canada) Inc. and its affiliate, AlphaPro Management Inc., are pleased to announce the launch of the Horizons Managed Global Opportunities ETF, a globally-focused, actively managed exchange traded fund (ETF), sub-advised by Forstrong Global Asset Management Inc.
Units of the ETF will begin trading today on the Toronto Stock Exchange in Canadian dollars under the ticker symbols "HGM" (Class E units) and "HGM.A" (Advisor Class units).
The investment objectives of HGM are to use flexible tactical asset allocation among multiple global asset classes to seek long term growth, while also seeking to protect against downside risk. HGM will invest primarily in exchange traded products that are listed on North American stock exchanges and may be exposed to equity securities, fixed-income securities or currencies around the world, or to gold. The three-tier investment model combines long-term and short-term macroeconomic views, statistical analysis and currency management to determine growing global trends, while managing the downside risk.
Canadian equities represent approximately 3% of world market capitalization, according to the MSCI All Country World Index. For fixed income, Canada represents approximately 2% of the investment grade debt currently outstanding, according to the Citi World Broad Investment-Grade Bond Index. However, Forstrong Global has found that many Canadian investor portfolios typically have more than 50% of their assets invested in domestic equities.
"Historically, Canadian investors have displayed a strong 'home bias' towards domestic asset classes; while patriotic, they have high concentration risk, especially in the financial and energy sectors that make up over half of domestic indices," says Howard Atkinson, President of Horizons ETFs. "The potential benefits of HGM are that it adds to the global diversification of one's portfolio, and offers a risk-based approach to managing asset allocation."
While Forstrong Global has been managing portfolios of ETFs for more than a decade now, this will be its first Canadian ETF.
"We are very excited about partnering with Horizons ETFs to bring our global expertise to a broader audience," says Tyler Mordy, President and Chief Investment Officer of Forstrong Global. "Through our first active ETF in Canada, we hope that investors can broaden the assets in their portfolio and open themselves up to the greater opportunities globally."
Forstrong Global applies a three-tier investment process to managing HGM's assets: first, it pairs a long-term macroeconomic view of global trends (three to five years) with a short-term (12-month) analysis of significant market events that are happening worldwide.
Next, it assesses the impact of these events to drive HGM's asset allocation, and then selects asset types and corresponding ETFs which are in line with the broader scenarios/themes. Thirdly, Forstrong Global considers the currency impact on the risk and return of its allocations and uses hedged and unhedged currency exposures to capitalize on their analysis, and to mitigate risk.
"Forstrong Global has the longest track-record in the world managing ETF-only portfolios and has built a stellar reputation both within and outside Canada," adds Mr. Atkinson. When it comes to investing outside of Canada, we feel that Canadian investors want professional expertise and insight - through a single efficient investment - but don't know where to start. HGM really blends the best of both worlds, by giving these investors access to a low-cost portfolio of primarily index-replicating ETFs overseen by a portfolio management team with extensive global investment expertise.
HGM closed the offering of its initial Class E and Advisor Class units and will begin trading today on the TSX when the market opens.