Horizons launches Hong Kong dividend fund

By Andrew Rickard | January 15 2016 09:24AM

Horizons ETFs Management launched its Horizons China High Dividend Yield Index (HCN) exchange traded fund on Jan. 12. The fund offers exposure to high dividend yielding equity securities listed on the Hong Kong stock exchange.

Horizons says the fund aims to earn returns that, before fees and expenses, generally correspond to the performance of the Hang Seng High Dividend Yield Index. This underlying index tracks the performance of 50 of the highest dividend yielding equity securities listed on the Hang Seng, including real estate investment trusts (REITs).

In a press release announcing the new fund, Horizons pointed to research conducted by Mirae Asset Global Investments which suggests that China’s growth rate will range between 6% and 8% over the next few years. Horizons says this is nearly four times the growth rate expected for developed economies such as the United States and Canada.

“Historically, many Canadian investors sought exposure to emerging Asia by holding North American multi-national stocks which have business interests in Asian economies,” says Steve Hawkins, the co-CEO of Horizons ETFs. “The dynamics of the Chinese economy are changing and, in order to really capture China’s long-term economic growth, investors should consider the direct exposure that HCN provides.”

The fund pays quarterly distributions, charges a management fee of 0.85%, and does not hedge its foreign currency exposure. There is no minimum purchase amount.