Horizons ETFs claims lowest-cost Canadian bank ETF

The new fund is among a new suite of ETFs giving investors exposure to core Canadian and US equities

Horizons ETFs claims lowest-cost Canadian bank ETF
Steve Randall

Horizons ETFs Management says it has launched the lowest-cost exchange traded fund (ETF) focused on Canadian banks.

The Horizons Equal Weight Banks Index ETF (HBNK) has an effective management fee and MER of 0.00% until July 31, 2024, making it Canada’s lowest-cost Canadian Bank ETF based on all publicly available data at the time of the announcement.

The fund provides equal-weight exposure to Canada's Big Six banks – Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce, and National Bank of Canada and the firm will make a voluntarily rebate of 0.09% of the management fee to achieve the 0.00% MER.

"Canada's Big Six Banks represent more than one-fifth of the S&P/TSX 60 Index," said Rohit Mehta, president, and CEO of Horizons ETFs. "With HBNK, we're excited to give investors the opportunity to access what has been one of the most stable and dividend-rich sectors through the lowest-cost ETF in the country."

Equity ETF suite

The Toronto-based fund manager has also launched a suite of new ETFs that aim to accelerate the performance of Canada's big banks and U.S. and Canadian large cap stocks through the strategic use of leverage or leverage together with covered calls.

These ‘Equity Essentials’ products include:

  • Horizons Enhanced Equal Weight Banks Index ETF
  • Horizons Enhanced Equal Weight Canadian Banks Covered Call ETF
  • Horizons Enhanced S&P/TSX 60 Index ETF
  • Horizons Enhanced Canadian Large Cap Equity Covered Call ETF
  • Horizons Enhanced US Large Cap Equity Covered Call ETF

These funds use leverage to potentially magnify gains and losses and aims to generate around 1.25x the return of the underlying indexes.

"Using a light leverage approach to investing can potentially provide a significantly higher return than traditional benchmark exposure over an extended period," explained Mehta. "Our Enhanced ETFs let Canadians potentially get more from their core equities, whether it's extra income potential from covered calls or the use of leverage to potentially accelerate returns."