Hitting the NYSE today, the new fund leverages a covered call strategy designed to potentially generate additional income from the option-eligible stocks in the S&P 500®.
Global ETF Innovator Offers Its First ETF in the U.S.
NEW YORK, June 24, 2013 (GLOBE NEWSWIRE) -- Horizons ETFs Management
(USA) LLC ("Horizons USA"), a member of the Horizons ETFs Group, one of
the largest collective families of ETFs in the world, announced that it
has launched the Horizons S&P 500(R) Covered Call ETF ("HSPX"), an
exchange traded fund (ETF) that uses an innovative covered call
strategy designed to potentially generate additional income from the
option-eligible stocks in the S&P 500(R), the most widely followed U.S.
large-cap stock index. The new ETF begins trading today on the New York
Stock Exchange under the symbol HSPX.
HSPX generally seeks to provide exposure to the performance of the S&P
500(R) Stock Covered Call Index (the "Underlying Index") and will make
monthly distributions of dividend and call option income. Horizons USA
has an exclusive agreement with Standard & Poor's to offer an ETF in
the U.S. based on the Underlying Index.
"The Horizons S&P 500(R) Covered Call ETF attempts to generate
additional monthly income for investors while lowering the volatility
of returns versus the S&P 500(R)" said Howard Atkinson, Managing
Director of Horizons USA. "We're pleased to be bringing to market the
first covered call ETF strategy that seeks to write on all eligible
individual stocks in the S&P 500(R) as it answers a growing need for
maintaining regular income streams in a persistent low-interest-rate
and shrinking-yield environment."
HSPX uses a replication strategy and invests substantially all of its
total assets in same securities of the Underlying Index. HSPX will
generally own all the securities of the S&P 500(R) in substantially
similar weights to the index, and will sell or "write" covered call
options on up to 100% of each of the option eligible securities in the
portfolio. A covered call is an options strategy whereby an investor
holds a long position in an asset and sells or "writes" call options on
that same asset in an attempt to generate more income (the additional
income from option premium) than the asset would otherwise provide on
its own from dividends or other distributions. The covered call
strategy is used by the Underlying Index in an attempt to generate
additional monthly income on the S&P 500(R).
Historically, during bear markets, range-bound markets and modest bull
markets, covered call strategies generally have outperformed their
underlying securities. During strong bull markets, when the underlying
securities may frequently rise through their strike prices, covered
call strategies historically have tended to lag. During these strong
bull markets, however, investors would still generally have earned some
capital appreciation on the stock positions, together with dividends
and the option premiums from writing the covered calls.
"Our team has more than two decades of experience overseeing covered
call investment vehicles," said Mr. Atkinson. "The Horizons S&P 500(R)
Covered Call ETF offers multiple security covered call execution to
individual investors through the low-cost, convenient structure of an
ETF."
Horizons USA serves as sub-adviser to HSPX. Exchange Traded Concepts,
LLC has listed HSPX on the NYSE Arca under its passive exemptive relief
and also serves as its adviser. Foreside Fund Services, LLC facilitates
distribution of HSPX. Citibank, NA and Citi Fund Services Ohio, Inc.
serve as custodian and administrator, respectively.
Separately, Horizons USA is pleased to announce that Adam Felesky has
been appointed Head of Americas for the Horizons ETFs businesses across
the United States, Canada and Latin America.
Mr. Felesky is Chief Executive Officer of Horizons ETFs Management
(Canada) Inc. ("Horizons Canada"). He founded Horizons Canada in 2005
and oversaw the launch of the first two Horizons ETFs. Over the next
five years, he oversaw the launch of more than 70 additional ETFs. Mr.
Felesky also acts as CEO and Director of all Horizons Canada's
operating subsidiaries. He is currently a member of the Ontario
Securities Commission - Investment Funds Product Advisory Committee and
a member of the Young Presidents Organization (YPO).
"We are very pleased to announce Adam's new appointment and his
expanded role in advancing our global ETF franchise. Adam has shown
leadership in building Horizons Canada and a commitment to taking it to
the next level. As we enter the U.S. ETF market, we are particularly
excited to have Adam lead the Americas' ETF businesses. This is an
exciting time and we look forward to continuing our work together,"
said Mr. Taeyong Lee, President of the Global Business Unit and Global
Head of ETFs at Mirae Asset Global Investments, the parent company of
the Horizons ETFs Group.
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