Horizons Cash Maximizer ETF | Page 2 | Investing | Discussion forum

Below NAV , absolutely its a buy and the further it's below its NAV price , the bigger the screaming buy it is. It's like bonus capital gain. The fear in this product is completely unjustified

HSAV is as safe as any other HISA ETF. The chart demonstrates this. Why suddenly would this trend end. Sure their is volatility in the immediate future. Either to your advantage or disadvantage. If an investor buys in at an over valued cost to NAV that's on the investor, suck it up and wait, or take a loss. If you don't know what you are buying then you have no business trading this. This product is in the category of LOW risk along with HISA ETF's.

Made another chart. I grabbed a screen shot on HSAV's Product page . It's the NAV daily chart from inception. As you can see the price is stable and consistently growing.

I took points of the NAV price and plotted those values at about 6 months apart placed it on the market chart.

ETF is trading as expected. Market price is being set by traders because of the lack of supply of shares. In my opinion , I think Horizons is satisfied with its price action. I think it will attract more investors.

Here are the negatives:
-100 percent of the deposited funds in one bank. Where is the hedging in that? Horizons has some explaining to do.
-Should interest rates ever drop back to 0 or near zero the MER could exceed returns. Solution is to be out well before it ever gets to that point.
-Yes this is not a CDIC insured product. You have to depend on regulators and National Bank 's risk management controls are competent. These banks are not FTX , worth $30 billion one day and the next day Bankrupt. Should this bank fail it would be well telegraphed like Credit Suisse ultimately failing after years of being badly managed to the point of collapse.

Final conclusion . The nay sayers still don't understand its movement and suffer from irrational fear. The investors that trade on average of 90K /day (stat from product page) must be fools.

TINAisOver, You seem to know alot about this product and I know I would greatly appreciate it if you would lead us in your trades.

Thank you very much.

AR said
TINAisOver, You seem to know alot about this product and I know I would greatly appreciate it if you would lead us in your trades.

Thank you very much.  

TINA said in post#22:

Here are the negatives:
-100 percent of the deposited funds in one bank. Where is the hedging in that? Horizons has some explaining to do.

Why does Horizons need to hedge it ??

its 100% safe IF one believes National bank is 100% safe. If one lives long enough and smart, one will know there is no such thing as 100%.
The brightest mind at global Central banks and Wall street never thought rate will go to zero before 2009.... Rate floor used to be 3% historical, until new record broke the historical record....

Am I saying the product is unsafe ? No. I am saying there is a tail risk.

And in response to it gapped up to $109 and fell straight back down to earth few months ago, it was trading $2-3 in premium at the time. I pointed it out at other forums how silly that is, paying away 1/2 year's worth of return to chase it. It subsequently traded down to par relatively quickly. So blame it on me if u bot at north or $109 and still under water 🙂

I own the HSUV which never behaved silly like the HSAV investors. I suspect HSAV are robinhood type investors (aka young ones.) And yes just because it traded 90k a day does not make those investors know something u dont.

TINAisOver said

They limited the share quantity below market demand creating a market value produced by traders. This in turn caused Horizons to issue an over the top statement warning and everyone's first reaction is the sky is falling. This warning statement was issued almost two years ago and nothing happened since.  

That’s not what they did. Horizons suspended new subscriptions, so market maker could no longer create new units. That was done (according to Horizons) so the manager is still able to manage tax implications. At the exact same time, Horizons warned that buying at a premium on secondary market they strongly advise against buying.

Trading above nav was expected, the warning was issued immediately on suspension and wasn’t a reaction to market pricing. And there is nothing “over the top”, the wording of the warning is very plain.

At some point in the future this units will trade at NAV. The fact it didn’t happen for 2 years means nothing. You just never know who will end up being the greater fool. And there are other risks.

https://horizonsetfs.com/press-release/horizons-cash-maximizer-etf-suspends-new-subscriptions-after-reaching-approximately-2-billion-in-assets/

mordko said

That’s not what they did. Horizons suspended new subscriptions, so market maker could no longer create new units. That was done (according to Horizons) so the manager is still able to manage tax implications. At the exact same time, Horizons warned that buying at a premium on secondary market they strongly advise against buying.

Trading above nav was expected, the warning was issued immediately on suspension and wasn’t a reaction to market pricing. And there is nothing “over the top”, the wording of the warning is very plain.

At some point in the future this units will trade at NAV. The fact it didn’t happen for 2 years means nothing. You just never know who will end up being the greater fool. And there are other risks.

https://horizonsetfs.com/press-release/horizons-cash-maximizer-etf-suspends-new-subscriptions-after-reaching-approximately-2-billion-in-assets/  

You are right the market maker produces and eliminates units. Never the less, Horizons, the fund manager is the decider of how many units are available in the market. Horizons did suspend subscriptions due to tax implications according to their statement and the volatile market price of HSAV was due to the suspension causing greater demand than supply for unit shares on the market. Thank you for the correction.

I agree , the price will eventually come back to NAV and below as long as this suspension on units is in place.

I would never buy this ETF above NAV . But apparently their are many that will. I would buy below NAV under the right conditions. Its already in my watch list but now I will set an alert triggered if the price deviates beyond a certain percentage below NAV.

savemoresaveoften said
exactly, this type of warning is nothing new. ETF issuers are obligated to issue this type of generic statement whenever the market price deviates too much from the NAV. It has happened to oil tracking ETFs in particular, most noticeably during covid. Cant remember the ticker for that one. Those who believed the sky is the limit and didnt understand the math on a 2X tracker got burned badly quickly.

Of course buying above NAV does not guarantee a loss, if you can pass the torch to the next person who believes the only way is up.  

I can tell you what that ETF was, HOU, I was holding it. the statement warning was due to unprecedented oil price volatility and may cause the ETF to go into negative value meaning you will be on the hook for it (oil / barrel traded -$37.00 at one point). Exceeding my risk appetite, I sold HOU and took a loss. Horizons made changes to HOU's inner workings and when the Oil prices returned to a positive upward trend I bought it back again.

Going below NAV by a material amount SHOULD result in the market maker 'destroying' ETF units (cashing them in) to help maintain NAV or placing enough units into market maker's own inventory to help maintain NAV.

Regardless, this HSAV product is really not for folks really just looking for a place to park funds in a 'bank account' on a temporary basis. That is what conventional Cash ETFs, ISAs, MMFs and HISA accounts are for. I doubt the OP of this long thread had any other intention other than looking for best 'after tax' yield.

canuckles said

Yes, I'm considering this ETF for tax purposes. However, I will be using it to park my funds on a temporary basis. Not saying that this is my tax rate, but @50%, a 6% GIC yield is only 3% and 4.1% HISA is 2% (these are the best rates I'm getting). Those rates are not very appealing after taxes.  

if its only temporary and u are paying above NAV, just be mindful the fluctuation in the premium u paid and what it will be when u need to cash out.

canuckles said

Yes, I'm considering this ETF for tax purposes. However, I will be using it to park my funds on a temporary basis. Not saying that this is my tax rate, but @50%, a 6% GIC yield is only 3% and 4.1% HISA is 2% (these are the best rates I'm getting). Those rates are not very appealing after taxes.  

Oddball and an additional concern.

HSAV is a unicorn . There are many HISA ETFs to choose from. This one is the only ETF (I can find) that acts more like a compounding interest bank account, similar to an ISA accessible by Fundserv.
The main point of these ETF's is to be able to store your unused cash earning interest as apposed to being held in your brokerage cash/margin account earning nothing or next to nothing. The funds never need to leave your brokerage account. The funds can be liquidated and redeployed instantly. ISA's through Fundserve take 1-2 days post withdrawals before funds are placed back into your brokerage account are available for trades. This makes these types of ETFs very useful for traders.

And there's the conundrum. Due to the quark in its trading behaviour due to Horizons, the fund manger, limiting the supply of the ETF units below market demand, still a bewilderment to me why. Because of this volatility, the market price going above and below NAV regularly (as shown in post #22 diagram), a trader / investor needs to apply the same decision making that goes into a stock/ETF or bond before placing a buy/sell order. This is why I don't use this particular product. For me, I need to park my cash everyday with the certainty that it is earning while I wait. I don't have the luxury of time to pick my desired entry point and exit. Regarding this consideration I have realized another concern.
The concern is another unknown quantity regarding HSAV. From the chart and the superimposed NAV line I added (post #22), we can see historically HSAV's behaviour in a flat and recently upward central bank interest rate cycle. We have yet to see how it behaves in an interest downward cycle. I speculate the market price will be closer to NAV or ride below it in extended periods. I expect it will still be in an overall slight incline direction due to the nature of its underlying assets, just much less so. Something to keep in mind.

I can see , Canuckles, what you aim to achieve. I may have a solution for you. I don't know what your time horizon is, but you mention "temporary". Instead of HSAV. Use one or a handful of the regular HISA ETFs. Buy them on ex-div. day and sell the day before the next ex-div. day and repeat the process. This will give you the longest strech of gain. I 'm not positive on this, but I expect this will produce a capital gain. I need to do more research to confirm the tax implications, but I'm fairly sure it does. Almost all my available cash that is not in stocks or ETFs are in HISA ETFs and I'm constantly going in and out of them, including today , ZMMk's ex-Div day is tomorrow. I mostly use ZMMK, CASH and to a lesser extent CMR. I prefer CASH as my number one, but this month the clear winner is ZMMK. Flipped it many times intraday this month and today is selling at a premium. Should my shares sell 50.10 today, I will buy it back tomorrow in a trading range of 49.88-90. Else, I may decide to sell @50.09 before close, still .5 above Div. ,or keep the Dividend. If I sell and buy back below 49.90 it's an additional slight gain. = to an even capital gain, and above it a slight loss of potential earnings. If your mission is to avoid interest income taxed at the highest level this may be your option. You can do this until should there be a favourable entry point for HSAV. Downside is it requires work , not much, at least 2 days a month per ETF. You will likely gain less than the total monthly dividend, 1-3 cents less. But still be in a better tax position.