Horizons rolls out actively managed Emerging Markets Bond ETF

By Susanna Moon

Chicago, Aug. 1 – Horizons ETFs Management (Canada) Inc. said it has launched the Horizons Active Emerging Markets Bond ETF, with units of the exchange-traded fund to begin trading on the Toronto Stock Exchange on Wednesday under the ticker symbol “HEMB.”

The ETF will have global exposure to fixed- and floating-rate instruments issued by sovereign, quasi-sovereign, supranational and corporate issuers. All U.S. dollar currency exposure is hedged back to Canadian dollars.

“HEMB seeks to generate income and long-term capital growth by investing primarily in the fixed- and floating-rate debt securities of emerging market issuers – a market segment that has strengthened in recent years and still offers higher yields than North American bonds,” according to a company announcement.

The fund is sub-advised by Fiera Capital Corp. and Mirae Asset Global Investments (USA) LLC.

Fiera Capital oversees the portfolio strategy of the ETF’s global asset allocation and security selection of sovereign bonds. Fiera Capital’s management responsibility falls to its tactical asset allocation committee, the release noted.

The target mix for sovereign and quasi-sovereign bonds in the portfolio will initially be about 80%, the release said.

Mirae Asset’s investment management team will oversee the security selection of the corporate issuances in the portfolio.

The target mix for corporate credit in the HEMB portfolio is initially approximately 20%.

“With the constantly evolving conditions within emerging bond markets, we believe active management is the only way to go for this sector,” Steve Hawkins, president and co-chief executive officer of Horizons ETFs, said in the press release.

Added Francois Bourdon, global chief investment officer at Fiera Capital: “Emerging market bonds have become a popular choice among investors as of late, and for good reason. In previous months, we’ve seen strong regional performance amidst a robust global market.”

“Through HEMB, investors gain exposure to those regions and governments that are well on their way to a more stable credit environment,” Bourdon added.

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