625 Madison Ave, Floor 3, New York, NY 10022

Horizons S&P 500 Covered Call ETF (HSPX)

WHY HSPX?


– Potential Monthly Income: HSPX has distributed between 0.04% – 0.94% per month since inception on 6/21/2013.

– Potential Upside: HSPX writes 2% out-of-the money call options which allows it to potentially participate in some of the upside growth when the S&P 500 index rises.

– Potential Income Enhancer: HSPX seeks to collect dividends from the S&P 500 Index companies and monthly options premium from selling index options – potentially creating a different source of income.

– Volatility Enhances Income:  Historically as volatility rises, so too does the level of premium that can be generated on call writing. This additional premium could potentially reduce the volatility of the ETF compared to non-covered call strategies, however, covered call writing can limit the upside potential of the underlying security.

– Options Execution: The ETF vehicle is beneficial to investors as it allows the ETF issuer to write the call options on the S&P 500 Index, rather than an individual investor needing to undertake a potentially expensive, time consuming, and complex call writing process.

FUND DETAILS (As Of May 25, 2018)
Ticker HSPX
Exchange NYSE Arca
CUSIP 44053G603
Inception Date 06/21/13
Fund Net Assets $47,274,333
Trading Volume 828
Bloomberg Ticker BXY
Total Gross Expense Ratio 0.65%
Currency USD
Eligibility Dividend Reinvestment Plan
Benchmark Cboe S&P 500 2% OTM BuyWrite Index

Investment Objective

The Horizons S&P 500 Covered Call ETF (“Fund”) seeks to provide investment results that will closely correspond, before fees and expenses, generally to the price and yield performance of the CBOE S&P 500 2% OTM BuyWrite Index (BXY Index).

Morningstar Rating™ – HSPX received a 5 star rating for the overall & 3 year period out of 82 funds in the Options Writing category via Morningstar as of 1/31/18

Index Description

The CBOE S&P 500 2% OTM BuyWrite Index (BXY Index) measures the total return of a portfolio consisting of equity securities of the companies included in the S&P 500 Index and call options systematically written on those securities through a “buy-write” or covered call strategy.

A “buy-write” strategy is an investment strategy in which the Fund buys a specific basket of stocks (such as the S&P 500 Index) and sells covered call options that correspond to that basket of stocks.

The BXY Index information can be found here.

Index Methodolody

HSPX tracks the BXY index, which is a passive total return index based on (1) buying a S&P 500 stock index portfolio, and (2) “writing” (or selling) the near-term S&P 500 Index (SPX) “covered” call option, generally on the third Friday of each month. The SPX call that is written will have about one month remaining to expiration, with an exercise price 2% above the prevailing index level (i.e., 2% out of the money). The SPX call is held until one day prior to expiration and is liquidated at a volume-weighted average price determined at the close. The SPX call option is settled in cash, at which time a new one-month,2% out of the money call is written.

After the close of trading on 12/14/2017, HSPX switched its index from the S&P 500® Stock Covered Call Index (SPXCC Index)  to the Cboe S&P 500 2% OTM BuyWrite Index (BXY Index).  The BXY index is similar the methodology used to calculate the SPXCC index, with one exception: In BXY the index uses Index options and in SPXCC the index uses single stock options.

MONTH END PERFORMANCE (4/30/18)

1 Mo 3 Mo 6 Mo YTD 1 Yr 3 Yr 5 Yr SIR*
HSPX (NAV) 0.73% -4.10% 1.70% -1.81% 8.16% 7.22% 8.85%
HSPX (Market Price) 1.89% -3.51% 2.27% -0.96% 8.65% 7.61% 9.01%
BXY** 0.79% -3.96% 1.53% -1.56% 10.16% 8.89% 9.56%
S&P 500 0.38% -5.77% 3.82% -0.38% 13.27% 10.57% 11.73%

 

QUARTER END PERFORMANCE (3/31/18)

1 Mo 3 Mo 6 Mo YTD 1 Yr 3 Yr 5 Yr SIR*
HSPX (NAV) -2.00% -2.52% 2.27% -2.52% 8.37% 7.22% 8.85%
HSPX (Market Price) -3.06% -2.79% 2.00% -2.79% 8.11% 7.02% 8.75%
BXY** -1.92% -2.33% 2.38% -2.33% 10.35% 9.02% 9.55%
S&P 500 -2.54% -0.76% 5.84% -0.76% 13.99% 10.78% 13.51%

 

GROWTH OF 10K SINCE INCEPTION


Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized. An investor cannot invest directly in an index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

HSPX tracks the BXY index, which is a passive total return index based on (1) buying a S&P 500 stock index portfolio, and (2) “writing” (or selling) the near-term S&P 500 Index (SPX) “covered” call option, generally on the third Friday of each month. The SPX call that is written will have about one month remaining to expiration, with an exercise price 2% above the prevailing index level (i.e., 2% out of the money). The SPX call is held until one day prior to expiration and is liquidated at a volume-weighted average price determined at the close. The SPX call option is settled in cash, at which time a new one-month, 2% out of the money call is written.

NAV: The dollar value of a single share, based on the value of the underlying assets of the fund minus its liabilities, divided by the number of shares outstanding. Calculated at the end of each business day.

Market Price: The current price at which shares are bought and sold. Market returns are based upon the last trade price.

*Performance since inception return on June 21, 2013.

**After the close of trading on 12/14/2017, HSPX switched its index from the S&P 500 Stock Covered Call Index (SPXCC Index) to the CBOE S&P 500 2% OTM BuyWrite Index (BXY Index). The BXY index is similar to the methodology used to calculate the SPXCC index, with one exception: In BXY the index uses index options and in SPXCC the index uses single stock options.

The Fund typically earns income dividends from stocks and interest from debt securities. These amounts, net of expenses, are typically passed along to Fund shareholders as dividends from net investment income. The Fund realizes capital gains from writing options and capital gains or losses whenever it sells securities. Any net realized long-term capital gains are distributed to shareholders as ‘‘capital gain distributions.’’ These do not imply rates for any future distributions. The ETF is not required to make distributions.

PRICE INFO (As Of May 25, 2018)
Day End Nav $49.76
Nav Change ($) $-0.09
Nav Change (%) -0.18%
Day End Market Price $49.69
Market Price Change ($) $-0.02
Market Price Change (%) -0.04%
Premium or Discount (%) -0.14%
Shares Outstanding 950,047
RISK METRICS (As Of Apr 30, 2018)
Metric HSPX S&P 500
Volatility (annualized) 5.51% 8.47%
Sharpe Ratio (annualized) 1.26 1.44
Beta 0.95 1.00
Correlation 0.98 1.00

The VXN reflects a market estimate of future volatility, based on the  weighted average of the implied volatilities for a wide range of strikes. 1st and 2nd month expirations are used until eight days from expiration, then the 2nd and 3rd month expirations are used.

2018 Distributions

Ex-dividend Date Record Date Payment Date Amount ($) Amount (%) Distribution Period
01/24/18 01/25/18 01/30/18 $0.25865 0.50% Monthly
02/21/18 02/22/18 02/27/18 $0.24985 0.51% Monthly
03/21/18 03/22/18 03/27/18 $0.24935 0.50% Monthly
04/25/18 04/26/18 05/01/18 $0.24510 0.51% Monthly
05/23/18 05/24/18 05/29/18 $0.25055 0.50% Monthly
06/20/18 06/21/18 06/26/18 Monthly
07/25/18 07/26/18 07/31/18 Monthly
08/22/18 08/23/18 08/28/18 Monthly
09/26/18 09/27/18 10/02/18 Monthly
10/24/18 10/25/18 10/30/18 Monthly
11/21/18 11/23/18 11/27/18 Monthly
12/27/18 12/28/18 12/31/18 Monthly

A portion of the distribution may include a return of capital. These do not imply rates for any future distributions. The ETF is not required to make distributions.

2017 Distributions

Ex-dividend Date Record Date Payment Date Amount ($) Amount (%) Distribution Period
01/25/17 01/27/17 01/31/17 $0.22658 0.49% Monthly
02/22/17 02/24/17 02/28/17 $0.06038 0.13% Monthly
03/22/17 03/24/17 03/28/17 $0.06147 0.13% Monthly
04/26/17 04/28/17 05/02/17 $0.22281 0.47% Monthly
05/24/17 05/26/17 05/30/17 $0.07704 0.16% Monthly
06/21/17 06/23/17 06/27/17 $0.05430 0.11% Monthly
07/26/17 07/28/17 08/01/17 $0.15441 0.11% Monthly
08/23/17 08/25/17 08/29/17 $0.24676 0.51% Monthly
09/20/17 09/22/17 09/26/17 $0.06029 0.12% Monthly
10/25/17 10/27/17 10/31/17 $0.03746 0.08% Monthly
11/22/17 11/27/17 11/28/17 $0.06708 0.13% Monthly
12/20/17 12/22/17 12/26/17 $1.43499 2.85% Monthly

A portion of the distribution may include a return of capital. These do not imply rates for any future distributions. The ETF is not required to make distributions.

2016 Distributions

Ex-dividend Date Record Date Payment Date Amount ($) Amount (%) Distribution Period
01/20/16 01/22/16 01/26/16 $0.33454 0.84% Monthly
02/24/16 02/26/16 03/01/16 $0.07997 0.20% Monthly
03/23/16 03/28/16 03/29/16 $0.07404 0.17% Monthly
04/20/16 04/22/16 04/26/16 $0.01656 0.04% Monthly
05/25/16 05/27/16 05/31/16 $0.26696 0.61% Monthly
06/22/16 06/24/16 06/28/16 $0.09122 0.21% Monthly
07/20/16 07/22/16 07/26/16 $0.03181 0.07% Monthly
08/24/16 08/26/16 08/30/16 $0.07562 0.17% Monthly
09/21/16 09/23/16 09/27/16 $0.19847 0.45% Monthly
10/26/16 10/28/16 11/01/16 $0.17596 0.40% Monthly
11/23/16 11/28/16 11/29/16 $0.07662 0.17% Monthly
12/21/16 12/23/16 12/27/16 $0.04998 0.11% Monthly

A portion of the distribution may include a return of capital. These do not imply rates for any future distributions. The ETF is not required to make distributions.

2015 Distributions

Ex-dividend Date Record Date Payment Date Amount ($) Amount (%) Distribution Period
01/21/15 01/23/15 01/28/15 $0.19387 0.43% Monthly
02/25/15 02/27/15 03/04/15 $0.06674 0.15% Monthly
03/25/15 03/27/15 04/01/15 $0.06916 0.15% Monthly
04/22/15 04/24/15 04/29/15 $0.13101 0.29% Monthly
05/20/15 05/22/15 05/27/15 $0.07109 0.15% Monthly
06/24/15 06/26/15 07/01/15 $0.18936 0.41% Monthly
07/22/15 07/24/15 07/29/15 $0.05754 0.13% Monthly
08/26/15 08/28/15 09/02/15 $0.36993 0.88% Monthly
09/23/15 09/25/15 09/30/15 $0.39641 0.94% Monthly
10/21/15 10/23/15 10/28/15 $0.03998 0.09% Monthly
11/25/15 11/30/15 12/02/15 $0.08472 0.19% Monthly
12/23/15 12/28/15 12/30/15 $0.36574 0.84% Monthly

A portion of the distribution may include a return of capital. These do not imply rates for any future distributions. The ETF is not required to make distributions.

2014 Distributions

Ex-dividend Date Record Date Payment Date Amount ($) Amount (%) Distribution Period
01/22/14 01/24/14 02/06/14 $0.01945 0.04% Monthly
02/26/14 02/28/14 03/13/14 $0.13465 0.30% Monthly
03/26/14 03/28/14 04/10/14 $0.04643 0.10% Monthly
04/23/14 04/25/14 05/08/14 $0.03311 0.07% Monthly
05/21/14 05/23/14 06/05/14 $0.07966 0.18% Monthly
06/25/14 06/27/14 07/02/14 $0.05169 0.11% Monthly
07/23/14 07/25/14 07/30/14 $0.03568 0.08% Monthly
08/20/14 08/22/14 08/27/14 $0.20482 0.44% Monthly
09/24/14 09/26/14 10/01/14 $0.17082 0.37% Monthly
10/22/14 10/24/14 10/29/14 $0.24998 0.55% Monthly
11/26/14 12/01/14 12/03/14 $0.18303 0.39% Monthly
12/24/14 12/29/14 12/31/14 $0.68400 1.49% Monthly

A portion of the distribution may include a return of capital. These do not imply rates for any future distributions. The ETF is not required to make distributions.

2013 Distributions

Ex-dividend Date Record Date Payment Date Amount ($) Amount (%) Distribution Period
07/24/13 07/26/13 08/09/13 $0.03920 0.09% Monthly
08/22/13 08/26/13 09/06/13 $0.15137 0.37% Monthly
09/25/13 09/27/13 10/09/13 $0.05004 0.12% Monthly
10/23/13 10/25/13 11/06/13 $0.03484 0.08% Monthly
11/21/13 11/25/13 12/06/13 $0.06507 0.15% Monthly
12/26/13 12/30/13 01/10/14 $0.75821 1.72% Monthly

A portion of the distribution may include a return of capital. These do not imply rates for any future distributions. The ETF is not required to make distributions.

Distribution Summary As Of 4/30/18
Distributions Paid Monthly
Last Payment Amount $0.24510
30-day SEC Yield 1.31%
12-month Trailing Yield 6.29%
Monthly Distribution 0.51%
YTD Distribution 2.08%
Annualized Distribution 6.09%
2017 Distribution 5.17%
2016 Distribution 3.24%
2015 Distribution 4.67%
2014 Distribution 2.78%
Top 10 Holdings

Company CUSIP Weighting
Apple Inc 037833100 4.10%
Microsoft Corp 594918104 3.28%
Amazon.com Inc 023135106 2.77%
Facebook Inc A 30303M102 1.87%
JPMorgan Chase & Co 46625H100 1.66%
Berkshire Hathaway Inc B 084670702 1.61%
Exxon Mobil Corp 30231G102 1.45%
Alphabet Inc C 02079K107 1.43%
Alphabet Inc A 02079K305 1.41%
Johnson & Johnson 478160104 1.38%

Holdings are subject to change. Download prior day business day holdings here.

© 2018 Horizons ETFs Management (US) LLC. All Rights Reserved.

Before investing you should carefully consider the fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained on this website. Please read the prospectus carefully before you invest.

Performance data quoted represents past performance and is no guarantee of future results. Investment return and principle value fluctuate, so that an investors shares, when redeemed, may be worth more or less than their original cost; and current performance may be higher or lower than the performance data quoted. Index returns are for illustrative purposes only. Investors cannot directly invest in an index and unmanaged index returns do not reflect any management fees, transaction costs or expenses. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with investments in the fund. 

There are risks involved with investing, including possible loss of principal. Concentration in a particular industry or sector will subject the funds to loss due to adverse occurrences that may affect that industry or sector. Each sector fund is subject to its own specific risk factors. See prospectus for specific risks regarding fund. Investors in the funds should be willing to accept a high degree of volatility in the price of the fund’s shares and the possibility of significant losses. International investing involves risks, including -risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets or in concentrations of single countries. Diversification may not protect against market risk or loss of principal.

HSPX engages in options trading. An option is a contract sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed upon price within a certain period or on a specific date. A covered call option involves holding a long position in a particular asset, in this case U.S. common equities, and writing a call option on that same asset with the goal of realizing additional income from the option premium. HSPX writes covered call index options on the S&P 500® Index. By selling covered call options, the fund limits its opportunity to profit from an increase in the price of the underlying index above the exercise price, but continues to bear the risk of a decline in the index. A liquid market may not exist for options held by the fund. While the fund receives premiums for writing the call options, the price it realizes from the exercise of an option could be substantially below the indices current market price.

Horizons ETFs Management (US) LLC is the investment adviser of the HSPX, DAX, QYLD, And USDY. The funds are distributed by Foreside Fund Services LLC, which is not affiliated with Horizons ETFs Management (US) LLC or any of its affiliates.

*Morningstar rating as of 3/31/18. the Morningstar rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life sub-accounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar risk-adjusted return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The overall Morningstar rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Individual shares of the horizons-branded exchange traded funds (the “funds”) may be purchased or sold in the secondary market throughout the regular trading day on the New York Stock Exchange or Nasdaq Exchange through a brokerage account. However, shares are not individually redeemable directly from the funds. Each fund issues and redeems shares on a continuous basis, at NAV, only in blocks of shares (“creation units”), principally in-kind for securities included in the relevant index. The creation units for DAX, QYLD, HSPX, and USDY are 50,000 shares.