Toronto, Ontario – April 28, 2020 – Hamilton Capital Partners Inc. (“Hamilton ETFs”) is pleased to announce the next phase of enhancements to its investment fund platform. Subject to all required unitholder and regulatory approvals, Hamilton ETFs is proposing to merge (the “Merger”) Hamilton Australian Financials Yield ETF (TSX: HFA, the “Terminating Fund”) into Hamilton Australian Bank Equal-Weight Index ETF (proposed TSX ticker: HBA, the “Continuing Fund”). If all necessary approvals are obtained, it is expected that the Merger will be effective on or about June 26, 2020 (the “Effective Date”).
“We are pleased to announce the evolution of our Australia mandate, which we believe provides numerous benefits to unitholders including a lower fee, more direct exposure to one of the world’s strongest banking sectors and an association with respected global index provider, Solactive AG,” said Rob Wessel, Managing Partner of Hamilton ETFs. “Over the past several decades, Australia has had among the most resilient economies globally, including relative to Canada. Upon completion of the proposed merger, we believe that the Hamilton Australian Banks Equal-Weight Index ETF will provide income-oriented investors the opportunity to diversify their Canadian financials holdings by gaining uncorrelated exposure to one of the best performing banking sectors.”
In accordance with applicable legal requirements, unitholders of the Terminating Fund will be required to approve the Merger. Unitholders will receive a Notice of Meeting and a Management Information Circular in accordance with applicable securities laws. The required unitholder approval will be sought at a special meeting to be held on or about June 17, 2020 for unitholders of the Terminating Fund of record as of May 18, 2020.
The Merger is proposed to be implemented on a taxable basis and would therefore be considered a disposition for tax purposes. The Merger may therefore have tax consequences for unitholders of the Terminating Fund.
If the Merger is approved, unitholders of the Terminating Fund will receive a management fee reduction of 0.10%.
The Independent Review Committee of the Terminating Fund has reviewed the proposed Merger and concluded that it achieves a fair and reasonable result for the Terminating Fund.
The Continuing Fund will be a new exchange-traded mutual fund managed by Hamilton ETFs. A preliminary prospectus and ETF facts were filed in respect of the Continuing Fund on April 28, 2020. A final prospectus and final ETF facts for the Continuing Fund will be filed, and a final receipt will be issued in respect thereof, prior to the Effective Date. Hamilton ETFs, on behalf of the Continuing Fund, has also applied to list units of the Continuing Fund on the Toronto Stock Exchange (“TSX”). Listing is subject to the approval of the TSX in accordance with its original listing requirements.
If the Merger is approved, upon the close of business on the Effective Date, units of the Terminating Fund will be exchanged for units of the Continuing Fund having a net asset value on the Effective Date equal to the net asset value of the units of the Terminating Fund. Following such exchange, unitholders of the Terminating Fund will become unitholders of the Continuing Fund. The Terminating Fund will subsequently be wound down and terminated following the Merger.
Units of the Terminating Fund are currently listed on the TSX and, should the Merger be approved, it is expected that its units will be delisted from the TSX at the close of business on or prior to the Effective Date (the “De-Listing Date”), subject to the approval of the TSX and in accordance with any conditions of such approval. Unitholders of the Terminating Fund will therefore be able to trade their units on the TSX up to the close of business on the De-Listing Date.
Following the Merger, automatic distribution reinvestment plans and any other optional services that had been established with respect to the Terminating Fund will be re-established with respect to the Continuing Fund.
About Hamilton Capital Partners Inc. (Hamilton ETFs)
Hamilton ETFs is a Canadian investment manager specializing in the global financial services sector, with a portfolio management team boasting over 60 years of combined experience. The firm’s specialized investment focus is driven by proprietary research, analysis, and analytical tools. Hamilton ETFs is also an active commentator on the global financial services sector; the firm’s most recent Insights can be found at www.hamiltonetfs.com/insights-commentary.
This press release is for information purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein. This press release is not for dissemination in the United States or for distribution to U.S. news wire services.