Horizons ETFs Management (Canada) Inc. is an investment firm that oversees the development of the Horizons-branded investment products in Latin America. Horizons ETFs Management (Canada) Inc. acts as Portfolio Manager for Fondo Bursátil Horizons Colombia Select de S&P (“HCOLSEL”), an exchange traded fund domiciled in Colombia.

The Horizons ETFs Group
The Horizons ETFs Group consists of innovative financial services companies offering regional families of ETFs in Colombia, Canada, South Korea, Hong Kong, Australia and the United States. Currently, all of the ETFs offered by these companies use the Horizons ETFs' brand with the exception of the 'BetaShares' family of ETFs in Australia and the 'Mirae Asset Tiger ETFs' family of ETFs in South Korea. With approximately USD $21.3 billion in assets under management and 237 ETF listings worldwide (as at January, 2018), the Mirae Asset Global ETF Network makes up one of the largest collective families of ETFs in the world. All of the Horizons ETFs Group companies and affiliates are subsidiaries of Mirae Asset Global Investments Group. Horizons ETFs USA products are distributed by Foreside Fund Services, LLC.

Mirae Asset Global Investments (www.MiraeAsset.com)
Mirae Asset Global Investments is the asset management business of Mirae Asset Financial Group, one of Asia's largest independent financial companies with approximately USD $400 billion in assets globally across investment banking and brokerage, life insurance and asset management. With approximately 730 employees, including 167 dedicated investment professionals, Mirae Asset Global Investments offers its clients a comprehensive suite of investment solutions from its offices in Australia, Brazil, Canada, China, Colombia, Hong Kong, India, South Korea, Taiwan, the U.K., the U.S. and Vietnam. Headquartered in Seoul, South Korea, the firm manages USD $122 billion in assets globally (as at December 31, 2017)

Daily closing values: Horizons ETFs publishes an ETF's previous day's closing market price and closing net asset value (NAV) per participation unit on its website.

Intraday values: An ETF's indicative intraday value, known as its Indicative Optimized Portfolio Value (IOPV), represents an estimate of an ETF's current fair (or theoretical) value. By comparing the IOPV with current bid/ask prices, investors and the general public can see whether an ETF is being priced fairly in the market and determine a price at or around which they might want to place a limit order. Indicative intraday values are calculated at 15-second intervals throughout the trading day. Consult your quotation service provider (e.g., Bloomberg or Thomson Reuters) for more information on how to look up an IOPV on your trading platform. 

Secondary Market Price: The price at which the participation units of the ETF trades on the Bolsa de Valores de Colombia (BVC) at any particular time during the trading day.
"ETF" stands for exchange traded fund. Like mutual funds, ETFs invest in an underlying basket of assets, such as stocks, bonds, currencies, options or commodities. Unlike mutual funds, however, the participation units of ETFs trade like ordinary shares, meaning that pricing is transparent and that ETFs can be bought and sold throughout the regular trading day on the stock exchange. ETFs generally aim to track, as closely as possible, the performance of a given index or asset class, before fees and expenses. They are transparent, liquid, cost-efficient and flexible investment tools – designed to be attractive to both individuals and institutional investors. In Colombia this type of instrument is known as a stock fund pursuant to Decree 2555 of the Republic of Colombia. 

Investors can use ETFs to:

-Gain low-cost, diversified exposure to markets and sectors
-Assist with long-term strategic or short-term tactical asset allocation
-Implement positive or negative views on markets or sectors

Passive index investing is a strategy whereby an investor buys a diversified market or sector index fund instead of picking individual stocks.

The approach has many potential benefits, including:

Lower transaction costs: The investor is able to gain instant exposure to an entire index or sector through one transaction rather than the multiple transactions required to buy many stocks individually.

Lower management fees: Index ETFs generally have much lower management fees than actively managed diversified investment funds.

Avoidance of market timing: Investors can avoid the difficulties and risks associated with trying to time the purchase of individual stocks, as well as the extensive costs associated with analyzing company-specific factors. A large body of empirical evidence suggests that many active portfolio managers are not able to significantly outperform their benchmark indices, over the long term, after fees and expenses. This observation seems to be supported by certain forms of the efficient-market theory.

Market returns: A passive ETF that tracks a particular index or sector generally achieves performance, before fees and expenses, in line with the performance of its underlying index or sector.

ETFs may make distributions of net investment income and/or capital gains, if any, on a monthly, quarterly, semi-annual or annual basis. Until a potential distribution date, any net investment income that the ETF receives from its underlying assets is reflected in the ETF's net asset value (NAV).

ETFs charge a management fee that is deducted from the assets of the ETF. This fee is specified in the constating documents approved by the Financial Superintendency of Colombia. It is expressed as an annualized percentage of assets. The ETF's daily net asset value (NAV) indicates the value of the ETF after ("net of") the deduction of management fees. For example, an investor who owns $100,000 of an ETF with a management fee of 0.60% (or "60 basis points") would pay $600 in management fees over the course of a year (assuming no change in the market value of the ETF). 

Since investors buy and sell ETF participation units through a brokerage account or an investment adviser like ordinary stocks, brokerage commissions and/or transaction costs or service fees may apply. Please consult your broker or financial advisor for their fee schedule.

Purchases or sales of participation units of ETFs traded in the secondary market through the Bolsa de Valores de Colombia (BVC) settle in cash in three business days (T + 3).

Participation units may be purchased or sold at any time throughout the regular trading day. There is no minimum holding period and no minimum investment.

Only Authorized Participants may create or redeem very large blocks of participation units known as "Creation Units" directly with the Management Company, Cititrust Colombia S.A. Sociedad Fiduciaria.

ETFs generally have three sources of liquidity: 

1. The stock exchange on which they are listed; 

2. Market Makers (designated broker-dealer firms) provide a minimum amount of liquidity by buying shares from the secondary market or selling shares to the market from their own inventory if there are too few buyers or sellers, or if bid/ask spreads get too far out of line with the NAV per share of the ETF's underlying assets; and 

3. Authorized Participants (typically broker-dealer firms) are able to issue or redeem very large blocks of shares known as "Creation Units" on each official valuation day to meet excess demand, or to absorb excess supply in the market. 

 
An ETF's market price is not necessarily the same as its net asset value (NAV) per share. All ETFs have two end-of-day "values". One is a closing market price, which is determined by trading activity in the ETF's shares on the stock exchange (usually the price at which the shares last traded during a trading session). 

The second is the net asset value (NAV) per share, which is calculated by the ETF's independent fund accountant after the market closes. The ETF's NAV is the weighted average price of each of its underlying assets, plus income and cash, minus liabilities such as management fees and expenses. 

An ETF's market price and NAV per share are typically close to each other but they may differ, especially in times of heightened market volatility. 

A premium or discount to NAV per share occurs when the market price of an ETF trades on the exchange above or below the NAV per share of its underlying basket of securities. For example, an ETF may trade at a premium or discount when: 

- its underlying assets trade at different hours than the stock exchange (e.g., commodities)
- its underlying assets trade infrequently (e.g., bonds)
- markets are in a heightened state of instability or flux (e.g., at the open and close of a trading day)
Tracking error is the difference over time between the performance of an ETF and the performance of the benchmark it follows (or "tracks"), such as an index. Most index ETFs track their benchmarks closely, but tracking error can occur as a result of fees and/or because some benchmarks are difficult to replicate perfectly. For example, an ETF with a management fee of 0.65% can be expected to have a tracking error of approximately 0.65% over the course of a year.
A Market Maker is a stock brokerage company whose function is to provide liquidity and to attempt to maintain a tight bid/ask spread so that the market price of the ETF participation units closely approximates (tracks) its NAV per participation unit. It provides liquidity by buying or selling participation units from its own inventory when there are few buyers or sellers in the market. This allows investors to get their orders filled when they choose to execute a trade, regardless of trading volume. 

 
Investors do not request the creation and redemption of ETF participation units directly involving the Management Company in the same way they would with traditional mutual funds. ETFs are designed to minimize portfolio turnover costs by trading in the secondary market through a stock exchange. ETFs restrict the direct creation and redemption of very large blocks of participation units (known as "Creation Units") to certain brokerage firms (referred to as "Authorized Participants") selected by the Fund Manager. 

These institutions can create and redeem participation units daily to meet market demand and to absorb excess supply, which helps the ETF to trade with maximum liquidity. 

Authorized Participants – Subscribing for Creation Units Direct from the Manager 

Only brokerage firms selected by the Portfolio Manager who have entered into an Authorized Participant agreement with the Management Company may apply to the latter to create or redeem Creation Units*. 

* While individual participation units can be bought or sold in the secondary market through the stock exchange, they are not individually acquired from, or redeemed by the Management Company directly; however, Authorized Participants may create (or redeem) very large blocks of participation units known as "Creation Units" directly from the Fund. The Fund issues and redeems participation units on a continuous basis, at NAV, only in blocks of at least 10,000 participation units ("Creation Units"), principally in exchange for a payment in-kind which usually consists of the securities included in the relevant Index.
Investors outside of Colombia may be able to purchase participation units of ETFs trading on the Bolsa de Valores de Colombia (BVC) provided they have access to the exchange through a registered brokerage firm in compliance with the requirements set out by the Bank of the Republic of Colombia for this type of investment in the jurisdiction of Colombia. 

Foreign shareholders (i.e., non-resident alien individuals and foreign corporations, partnerships, trusts and estates) may be subject to Colombian withholding taxes, unless a lower treaty rate or certain exemptions apply. For more information, please read an ETF's constating documents and consult your tax or financial advisor.
As with all funds, exchange traded funds (ETFs) generally are subject to the risks involved with investing, including (among others) the risk of possible loss of principal resulting from fluctuations in the prices of the assets making up an ETF. Diversification cannot protect against market risk. Securities concentrated in a single country or a single region or sector may be subject to greater volatility. Other kinds of risks are also associated with ETF investments and are described in the constating documents. Please read the constating documents carefully before investing.

To learn more, please contact your broker/financial advisor or Horizons ETFs Management directly at + 57 1 319 2706 or e-mail: info@horizonsetfs.com

Write: Horizons ETFs Management
Carrera 7 # 71 -21 Torre B Oficina 1301
Bogotá, Colombia

Fondo Bursátil Horizons Colombia Select de S&P (“HCOLSEL”) seeks investment results that, before fees and expenses, are comparable to the S&P Colombia Select Index (the “Index”), which is designed to track the performance of the largest and most liquid stocks listed on the Bolsa de Valores de Colombia (“BVC”).

Fiduciaria Bogotá S.A (Fidubogotá) is one of Colombia’s largest mutual fund providers. It acts as the management company of the Horizons Colombia Select De S&P. More information can be found on the Fiduciaria Bogotá website. http://www.fidubogota.com.

Horizons ETFs Management (Canada) Inc. acts as the portfolio manager of the Fondo Bursátil Horizons Colombia Select de S&P (“HCOLSEL”).

Created and calculated by Standard & Poor’s, one of the world’s most recognized index providers, the S&P Colombia Select Index is designed to be a sector diversified benchmark index of the Colombia equity market. 

Key Features


-No single stock will have more than a 15 per cent weight in the Index, thereby reducing single stock risk
-Sector weights are capped at 40 per cent to reduce sector concentration and allow for greater sector diversification
-Robust liquidity screens reduce ETF replication constraints (i.e. can efficiently accommodate large-dollar orders)
-As the Colombian stock market grows, so can the number of holdings in the index to reflect this changing landscape
-Independent S&P committee oversees the management and policies of the Index
-Price, net and total-return versions of the Index available in both USD and COP
-Constituents restricted to Colombian domiciled companies listed on the BVC
-The Index uses an industry classification scheme which allows investors to compare global securities

Horizons ETFs Management (Canada) Inc. is an investment firm that oversees the development of the Horizons-branded investment products in Latin America. Horizons ETFs Management (Canada) Inc. acts as Portfolio Manager for Fondo Bursátil Horizons Colombia Select de S&P (“HCOLSEL”), an exchange traded fund domiciled in Colombia.

The Horizons ETFs Group
The Horizons ETFs Group consists of innovative financial services companies offering regional families of ETFs in Colombia, Canada, South Korea, Hong Kong, Australia and the United States. Currently, all of the ETFs offered by these companies use the Horizons ETFs' brand with the exception of the 'BetaShares' family of ETFs in Australia and the 'Mirae Asset Tiger ETFs' family of ETFs in South Korea. With approximately USD $21.3 billion in assets under management and 237 ETF listings worldwide (as at January, 2018), the Mirae Asset Global ETF Network makes up one of the largest collective families of ETFs in the world. All of the Horizons ETFs Group companies and affiliates are subsidiaries of Mirae Asset Global Investments Group. Horizons ETFs USA products are distributed by Foreside Fund Services, LLC.

Mirae Asset Global Investments (www.MiraeAsset.com)
Mirae Asset Global Investments is the asset management business of Mirae Asset Financial Group, one of Asia's largest independent financial companies with approximately USD $400 billion in assets globally across investment banking and brokerage, life insurance and asset management. With approximately 730 employees, including 167 dedicated investment professionals, Mirae Asset Global Investments offers its clients a comprehensive suite of investment solutions from its offices in Australia, Brazil, Canada, China, Colombia, Hong Kong, India, South Korea, Taiwan, the U.K., the U.S. and Vietnam. Headquartered in Seoul, South Korea, the firm manages USD $122 billion in assets globally (as at December 31, 2017)

"ETF" stands for exchange traded fund. Like mutual funds, ETFs invest in an underlying basket of assets, such as stocks, bonds, currencies, options or commodities. Unlike mutual funds, however, the participation units of ETFs trade like ordinary shares, meaning that pricing is transparent and that ETFs can be bought and sold throughout the regular trading day on the stock exchange. ETFs generally aim to track, as closely as possible, the performance of a given index or asset class, before fees and expenses. They are transparent, liquid, cost-efficient and flexible investment tools – designed to be attractive to both individuals and institutional investors. In Colombia this type of instrument is known as a stock fund pursuant to Decree 2555 of the Republic of Colombia. 

Investors can use ETFs to:

-Gain low-cost, diversified exposure to markets and sectors
-Assist with long-term strategic or short-term tactical asset allocation
-Implement positive or negative views on markets or sectors

Passive index investing is a strategy whereby an investor buys a diversified market or sector index fund instead of picking individual stocks.

The approach has many potential benefits, including:

Lower transaction costs: The investor is able to gain instant exposure to an entire index or sector through one transaction rather than the multiple transactions required to buy many stocks individually.

Lower management fees: Index ETFs generally have much lower management fees than actively managed diversified investment funds.

Avoidance of market timing: Investors can avoid the difficulties and risks associated with trying to time the purchase of individual stocks, as well as the extensive costs associated with analyzing company-specific factors. A large body of empirical evidence suggests that many active portfolio managers are not able to significantly outperform their benchmark indices, over the long term, after fees and expenses. This observation seems to be supported by certain forms of the efficient-market theory.

Market returns: A passive ETF that tracks a particular index or sector generally achieves performance, before fees and expenses, in line with the performance of its underlying index or sector.

ETFs may make distributions of net investment income and/or capital gains, if any, on a monthly, quarterly, semi-annual or annual basis. Until a potential distribution date, any net investment income that the ETF receives from its underlying assets is reflected in the ETF's net asset value (NAV).

ETFs charge a management fee that is deducted from the assets of the ETF. This fee is specified in the constating documents approved by the Financial Superintendency of Colombia. It is expressed as an annualized percentage of assets. The ETF's daily net asset value (NAV) indicates the value of the ETF after ("net of") the deduction of management fees. For example, an investor who owns $100,000 of an ETF with a management fee of 0.60% (or "60 basis points") would pay $600 in management fees over the course of a year (assuming no change in the market value of the ETF). 

Since investors buy and sell ETF participation units through a brokerage account or an investment adviser like ordinary stocks, brokerage commissions and/or transaction costs or service fees may apply. Please consult your broker or financial advisor for their fee schedule.

Purchases or sales of participation units of ETFs traded in the secondary market through the Bolsa de Valores de Colombia (BVC) settle in cash in three business days (T + 3).

Participation units may be purchased or sold at any time throughout the regular trading day. There is no minimum holding period and no minimum investment.

Only Authorized Participants may create or redeem very large blocks of participation units known as "Creation Units" directly with the Management Company, Cititrust Colombia S.A. Sociedad Fiduciaria.

Daily closing values: Horizons ETFs publishes an ETF's previous day's closing market price and closing net asset value (NAV) per participation unit on its website.

Intraday values: An ETF's indicative intraday value, known as its Indicative Optimized Portfolio Value (IOPV), represents an estimate of an ETF's current fair (or theoretical) value. By comparing the IOPV with current bid/ask prices, investors and the general public can see whether an ETF is being priced fairly in the market and determine a price at or around which they might want to place a limit order. Indicative intraday values are calculated at 15-second intervals throughout the trading day. Consult your quotation service provider (e.g., Bloomberg or Thomson Reuters) for more information on how to look up an IOPV on your trading platform. 

Secondary Market Price: The price at which the participation units of the ETF trades on the Bolsa de Valores de Colombia (BVC) at any particular time during the trading day.
Investors outside of Colombia may be able to purchase participation units of ETFs trading on the Bolsa de Valores de Colombia (BVC) provided they have access to the exchange through a registered brokerage firm in compliance with the requirements set out by the Bank of the Republic of Colombia for this type of investment in the jurisdiction of Colombia. 

Foreign shareholders (i.e., non-resident alien individuals and foreign corporations, partnerships, trusts and estates) may be subject to Colombian withholding taxes, unless a lower treaty rate or certain exemptions apply. For more information, please read an ETF's constating documents and consult your tax or financial advisor.
As with all funds, exchange traded funds (ETFs) generally are subject to the risks involved with investing, including (among others) the risk of possible loss of principal resulting from fluctuations in the prices of the assets making up an ETF. Diversification cannot protect against market risk. Securities concentrated in a single country or a single region or sector may be subject to greater volatility. Other kinds of risks are also associated with ETF investments and are described in the constating documents. Please read the constating documents carefully before investing.

To learn more, please contact your broker/financial advisor or Horizons ETFs Management directly at + 57 1 319 2706 or e-mail: info@horizonsetfs.com

Write: Horizons ETFs Management
Carrera 7 # 71 -21 Torre B Oficina 1301
Bogotá, Colombia

Fondo Bursátil Horizons Colombia Select de S&P (“HCOLSEL”) seeks investment results that, before fees and expenses, are comparable to the S&P Colombia Select Index (the “Index”), which is designed to track the performance of the largest and most liquid stocks listed on the Bolsa de Valores de Colombia (“BVC”).

Fiduciaria Bogotá S.A (Fidubogotá) is one of Colombia’s largest mutual fund providers. It acts as the management company of the Horizons Colombia Select De S&P. More information can be found on the Fiduciaria Bogotá website. http://www.fidubogota.com.

Horizons ETFs Management (Canada) Inc. acts as the portfolio manager of the Fondo Bursátil Horizons Colombia Select de S&P (“HCOLSEL”).

Created and calculated by Standard & Poor’s, one of the world’s most recognized index providers, the S&P Colombia Select Index is designed to be a sector diversified benchmark index of the Colombia equity market. 

Key Features


-No single stock will have more than a 15 per cent weight in the Index, thereby reducing single stock risk
-Sector weights are capped at 40 per cent to reduce sector concentration and allow for greater sector diversification
-Robust liquidity screens reduce ETF replication constraints (i.e. can efficiently accommodate large-dollar orders)
-As the Colombian stock market grows, so can the number of holdings in the index to reflect this changing landscape
-Independent S&P committee oversees the management and policies of the Index
-Price, net and total-return versions of the Index available in both USD and COP
-Constituents restricted to Colombian domiciled companies listed on the BVC
-The Index uses an industry classification scheme which allows investors to compare global securities
ETFs generally have three sources of liquidity: 

1. The stock exchange on which they are listed; 

2. Market Makers (designated broker-dealer firms) provide a minimum amount of liquidity by buying shares from the secondary market or selling shares to the market from their own inventory if there are too few buyers or sellers, or if bid/ask spreads get too far out of line with the NAV per share of the ETF's underlying assets; and 

3. Authorized Participants (typically broker-dealer firms) are able to issue or redeem very large blocks of shares known as "Creation Units" on each official valuation day to meet excess demand, or to absorb excess supply in the market. 

 
An ETF's market price is not necessarily the same as its net asset value (NAV) per share. All ETFs have two end-of-day "values". One is a closing market price, which is determined by trading activity in the ETF's shares on the stock exchange (usually the price at which the shares last traded during a trading session). 

The second is the net asset value (NAV) per share, which is calculated by the ETF's independent fund accountant after the market closes. The ETF's NAV is the weighted average price of each of its underlying assets, plus income and cash, minus liabilities such as management fees and expenses. 

An ETF's market price and NAV per share are typically close to each other but they may differ, especially in times of heightened market volatility. 

A premium or discount to NAV per share occurs when the market price of an ETF trades on the exchange above or below the NAV per share of its underlying basket of securities. For example, an ETF may trade at a premium or discount when: 

- its underlying assets trade at different hours than the stock exchange (e.g., commodities)
- its underlying assets trade infrequently (e.g., bonds)
- markets are in a heightened state of instability or flux (e.g., at the open and close of a trading day)
Tracking error is the difference over time between the performance of an ETF and the performance of the benchmark it follows (or "tracks"), such as an index. Most index ETFs track their benchmarks closely, but tracking error can occur as a result of fees and/or because some benchmarks are difficult to replicate perfectly. For example, an ETF with a management fee of 0.65% can be expected to have a tracking error of approximately 0.65% over the course of a year.
A Market Maker is a stock brokerage company whose function is to provide liquidity and to attempt to maintain a tight bid/ask spread so that the market price of the ETF participation units closely approximates (tracks) its NAV per participation unit. It provides liquidity by buying or selling participation units from its own inventory when there are few buyers or sellers in the market. This allows investors to get their orders filled when they choose to execute a trade, regardless of trading volume. 

 
Investors do not request the creation and redemption of ETF participation units directly involving the Management Company in the same way they would with traditional mutual funds. ETFs are designed to minimize portfolio turnover costs by trading in the secondary market through a stock exchange. ETFs restrict the direct creation and redemption of very large blocks of participation units (known as "Creation Units") to certain brokerage firms (referred to as "Authorized Participants") selected by the Fund Manager. 

These institutions can create and redeem participation units daily to meet market demand and to absorb excess supply, which helps the ETF to trade with maximum liquidity. 

Authorized Participants – Subscribing for Creation Units Direct from the Manager 

Only brokerage firms selected by the Portfolio Manager who have entered into an Authorized Participant agreement with the Management Company may apply to the latter to create or redeem Creation Units*. 

* While individual participation units can be bought or sold in the secondary market through the stock exchange, they are not individually acquired from, or redeemed by the Management Company directly; however, Authorized Participants may create (or redeem) very large blocks of participation units known as "Creation Units" directly from the Fund. The Fund issues and redeems participation units on a continuous basis, at NAV, only in blocks of at least 10,000 participation units ("Creation Units"), principally in exchange for a payment in-kind which usually consists of the securities included in the relevant Index.