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Jovian Announces Launch of World';s First Gold/Silver Spread ETFs

^{Published on 2011-08-18 08:11:49 - Market Wire}
 

TORONTO, Aug. 18, 2011 /CNW/ - Jovian Capital Corporation ("Jovian") (TSX: JOV) and its subsidiaries Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and BetaPro Management Inc. ("BetaPro") are now offering Canadian investors a new way to invest in precious metals by listing the world's first gold/silver spread exchange traded funds (the "Gold/Silver Spread ETFs"), which began trading on the Toronto Stock Exchange today.

Horizons BetaPro COMEX^® Long Gold/Short Silver ETF ("Horizons HBZ") and the Horizons BetaPro COMEX^® Long Silver/Short Gold ETF ("Horizons HZB") offer two different ways for investors to attempt to take advantage of relative price changes between gold and silver futures contracts.

The ticker symbols for the two Gold/Silver Spread ETFs are:

Horizons HBZ seeks daily investment results, before fees and costs, that endeavour to correspond to the sum of one times (100%) of the daily performance of the COMEX^® gold futures contract for a subsequent delivery month and one times (100%) the inverse (opposite) of the daily performance of the COMEX^® silver futures contract for a subsequent delivery month.

Horizons HZB seeks daily investment results, before fees and costs, that endeavour to correspond to the sum of one times (100%) of the daily performance of the COMEX^® silver futures contract for a subsequent delivery month and one times (100%) the inverse (opposite) of the daily performance of the COMEX^® gold futures contract for a subsequent delivery month.

"Last year, we launched the world's first pair of commodity spread ETFs, which allow investors to invest in the price differential between crude oil and natural gas," said Howard Atkinson, CEO of Horizons ETFs. "The price spread between gold and silver is also a widely followed relationship and can be viewed as a third option to investing in gold and silver, beyond simply taking a long or short position in those two precious metals."

Both silver and gold prices have hit record highs over the last year. Over the last ten years, the two precious metals do tend to have a price relationship that has tended to fluctuate between 40:1 and 80:1, where an ounce of gold trades anywhere between 40 times to 80 times the price of an ounce of silver. While the two metals may both go up or down in price, investors can still potentially profit from trading the spread between the two metals if the price differential between them contracts or expands.

"With a spread ETF you don't necessarily need to get the market direction call of gold or silver correct. Instead, you want to look at whether one metal is going to outperform the other," Mr. Atkinson said. "We believe that using an ETF is a much more efficient way to execute this type of pair-trading strategy, with an investor's risk limited to their invested capital."

Any U.S. dollar gains or losses as a result of the Gold/Silver Spread ETFs' investments will be hedged back to the Canadian dollar to the best of their ability. Both ETFs will be rebalanced daily to ensure they will have equal exposure to its long index and short index to start each day.

Horizons HBZ and Horizons HZB have closed the offering of their initial units and began trading today on the TSX when the market opened this morning.

About Horizons Exchange Traded Funds Inc. ([ www.horizonsetfs.com ])
Horizons ETFs is an innovative financial services company offering the Horizons ETFs family of ETFs. The Horizons ETFs family includes a broadly diversified range of investment tools with solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. With approximately $3 billion in assets under management and more than 70 ETF listings on the TSX, the Horizons ETFs family makes up the largest selection of ETFs in Canada. Horizons ETFs is a member of the Jovian Capital Corporation group of companies.

About Jovian Capital Corporation
Jovian acquires, creates and grows financial services companies specializing in three primary market segments: wealth management, traditional asset managers, and exchange traded fund asset managers. The Jovian group of companies (AlphaPro Management Inc., BetaPro Management Inc., Hahn Investment Stewards & Company Inc., Horizons Exchange Traded Funds Inc., JovInvestment Management Inc., Leon Frazer & Associates Inc., MGI Financial Inc., MGI Securities Inc., MGI Securities (USA) Inc. and T.E. Wealth) manages approximately $13.5 billion of client assets ($8.0 billion in assets under management and $5.5 billion in assets under administration).  Additional information is available at [ www.joviancapital.com ] and [ www.sedar.com ].