New multi-class corporate structure preserves tax-efficient exposure for two ETF suites
Horizons ETFs has completed the reorganization of 29 of its ETFs under a new corporate structure.
The multi-class corporate fund structure, Horizons ETF Corp., is managed by Horizons ETFs following the approval of unitholders of the ETFs at special meetings held earlier this month.
The reorganization, which took effect after close of business on November 27, included the Horizons ETFs' BetaPro suite of ETFs, 25 funds with a unique-to-Canada structure offering leveraged, inverse and inverse-leveraged exposure to 12 different indices and asset classes.
Four ETFs that provide commodity exposure through swaps and futures — Horizons Gold ETF (HUG), Horizons Silver ETF (HUZ), Horizons Crude Oil ETF (HUC) and Horizons Natural Gas ETF (HUN) — were also included in the reorganization.
“Following months of hard work with our advisors, bank counterparties, unitholders and the regulators, we are excited to announce that we have successfully reorganized our BetaPro and Commodity suites of ETFs into our new corporate class structure,” said Steve Hawkins, president and CEO of Horizons ETFs.
The reorganized ETFs, now trading on the TSX as a corporate class of ETF shares of Horizons ETF Corp. include:
“We wanted to keep things as straightforward as possible so none of the investment objectives, names or ticker symbols of the ETFs changed,” Hawkins said. “This new corporate class structure simply allows Horizons ETFs to continue to provide tax-efficient exposure to a variety of popular asset classes.”
The firm also expects a similar reorganization of its Total Return suite of ETFs after close of business on November 29, after which the 15 Total Return ETFs will trade on the TSX as a corporate class of ETF shares of Horizons ETF Corp. on December 2.
The reorganizations are not expected to be taxable events for Canadian resident unitholders; however, for the exchange of their trust units into the corresponding class of ETF Shares of Horizons ETF Corp. to occur on a tax-deferred basis, those who hold units of the affected ETFs in taxable accounts must make a joint election with Horizons ETF Corp. under Section 85 of the Income Tax Act.
“Horizons ETFs has established a process to provide assistance to unitholders in taking the necessary steps to file the joint election, which is available free of charge,” the firm said, referring to a web page with information and instructions for affected unitholders.