-- Posted Wednesday, 10 January 2007 | Digg This Article
By Jack Chan at www.simplyprofits.org
Leveraged and inversed ETFs have come to Canada. Horizon Beta Pro launched two ETFs yesterday using the S&P/TSX 60 Index as the underlying index. Following is a summary of terms:
Horizon BetaPro 60 Bull + ETF
Symbol: HXU
Listed: Toronto Exchange
Trading hours: 9:30 AM to 4:00 PM Eastern Time
Leverage factor: 200% daily exposure
Management Expense Ratio: 1.15%
Distributions: Annually
RSP Eligible: Yes
Horizon BetaPro 60 Bear + ETF
Symbol: HXD
Listed: Toronto Exchange
Trading hours: 9:30 AM to 4:00 PM Eastern Time
Leverage factor: 200% daily exposure
Management Expense Ratio: 1.15%
Distributions: Annually
RSP Eligibility: Yes
These two ETFs effectively eliminate the trouble trading the related Betapro funds, which has an early cut off time, and early redemption fees. As ETFs become more mainstream in Canada for Canadians, I expect more ETFs to be launched in the soon future for metals, energy, and tech. This will help to supplement our current Cdn ETFs such as XGD and XEG, and finally a chance to play the short side using a Cdn ETF.
$SPTSE – currently on TLBSS. Traders should be short or in cash.
This index comprises of energy, metals, financials, transportation, and growth stocks, therefore, similar to our energy and gold sector cycles, but could lead or lag sometimes. The $BPTSE will help to confirm the buy/sell signals within this index just like our BP cycle charts confirming the three sectors of energy, gold and tech.
To view all the stocks within this index, go to : www.globeinvestor.com, registration is free. Symbol is TTHC-I
HXU.TO – the leveraged bull ETF.
HXD.TO – the leveraged bear ETF.
Summary
I have added $SPTSE to my blog and I will begin to track this index for its signals and set ups.
Traders who wish to trade this index and its new ETFs can do so on their own for now. Due to its close relationship with the gold and energy sector, my signals and set ups continue to focus on XGD and XEG.
However, the bright spot is that the HXD will provide Cdn traders the shorting opportunity without incurring currency exchange fees or taking on currency risks by keeping their funds inside of Canada and inside of their RRSPs. It also provides an excellent hedge for Cdn investors holding a significant portfolio of stock holdings during a down cycle or worse yet, a bear market if and when.
Liquidity will be an issue for these new ETFs, I suggest those who trade them do not make the same mistake I did with PSQ recently. Take your signals and set ups from the index of $SPTSE, and not the ETFs of HXU and HXD. The bid/ask on these two ETFs could be quite wide at times, caution is advised.
-- Posted Wednesday, 10 January 2007 | Digg This Article
