Topic: How To Invest

Q: Hi, Pat. I am wondering about investing in the Horizons Seasonal Rotation ETF. What are your thoughts on this ETF? Thanks.

Article Excerpt

A: The Horizons Seasonal Rotation ETF, $25.37, symbol HAC on Toronto (Units outstanding: 6.8 million; Market cap: $172.3 million;, aims to tactically spread and move around its holdings between stocks, fixed-income investments, commodities and currencies based on historical seasonal trends. The managers believe that investment markets follow these seasonal trends and so have seasonal rhythms. Some of these patterns occur over the course of weeks or months; others last only a few days. According to its sales literature, by rotating a portfolio in reaction to these seasonal patterns, a “well-informed investor can realize returns that are superior to a static investment in broader markets and sector markets.” An example is the belief that gold stocks tend to peak in the late spring and then bottom in the early summer before moving up again later in the year. Notably, apart from holding 71.4% of its assets in cash, the Horizons Seasonal Rotation ETF currently has 14.2% of its assets in Horizons foreign bond ETFs. The…