HORIZONS ETFsPROFIT OR PROTECT IN BEAR OR BULL MARKETS™

Host: Jaime Purvis, Horizons Exchange Traded Funds

October 26, 2010

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ETF INDUSTRY OVERVIEW

Global ETF assets US$1,181.3 BN

2,379 ETFs from 129 providers on 45 exchanges

478 new ETFs (YTD)

Average daily trading volume US$58.2 BN

3,257 Exchange Traded products

Global ETF industry Q3 2010

Source: Barclays Global Investors

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BETA FUNDS ORIGINATED IN THE U.S.

‘Beta ETFs and Funds’ are the fast growing segment of U.S. mutual funds and ETFs with current AUM in excess of an estimated $50BN

Initial growth was driven by “discretionary” retail market, but institutional use has grown rapidly, and now takes up approximately 55% of market share

Market is dominated by two players: Rydex & ProFunds, both established in the mid ’90s, Direxxion growing fast (3x)

ProShares, part of the ProFunds Group, launched the first Bull & Bear ETFs in the United States in June 2006 on the AMEX

•   AUM is already in excess of $4BN with 52 ETFs BetaPro Management entered into a 10-yr exclusive sub-advisory contract with ProFunds Group

in 2005 Leveraged ETFs introduced in US in June 2006, in Canada in January 2007

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ABOUT HORIZONS BETAPRO ETFs

Offers investors four types of ETF structures to profit or protect in all market conditions

HBP Single ETFs: provide exposure to the performance of 4 underlying commodity and

1 equity benchmark, before fees and expenses

HBP Inverse ETFs: provide exposure to the inverse daily performance of 7 underlying

benchmarks before fees and expenses

HBP Bull+ & Bear+ ETFs: provide double exposure to the daily performance (or inverse daily

performance) of 15 underlying benchmarks before fees and expenses. Risk limited to initial

capital invested

HBP Spread ETFs: provide daily long exposure to one underlying commodity benchmark and

inverse daily exposure to another underlying commodity benchmark, before fees and expenses HBP offers the most ETFs listed on the TSX with 44 and accounted for over 60%* of all trading

volume on the TSX. Exclusive provider of leveraged, inverse leveraged and spread ETFs in Canada World's first leveraged and inverse leveraged commodity ETFs tracking

NYMEX® Crude Oil, NYMEX® Natural Gas, COMEX® Gold, COMEX® Silver and COMEX® Copper

*For the period from Jan 1 to June 30, 2010

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HORIZONS ETFs ASSET GROWTH

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HORIZONS BETAPRO SERVICE PROVIDERS

Horizons BetaPro ETFs are managed by BetaPro Management Inc. Currently have 44 ETFs listed on TSX Account for over 60% of CDN ETF trading volume* Currently account for almost 10% of all TSX trading volume

Parent Company: Jovian Capital Corporation (JOV: TSX) JOV owns approximately 60% of HBP Financial services holding company with over $12BN in client assets** Murray Edwards holds a 30% minority interest in JOV

Custodians Primary: State Street Trust Company Secondary: CIBC Mellon

Sub-Advisor: ProShare Advisors LLC U.S. based ETF provider with over $27 BN in AUM across 174 ETFs and Mutual Funds***

*For the period from Jan 1 to June 30, 2010. **As at September 30, 2010. ***as at June 30, 2010

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HORIZONS BETAPRO ETFs: PROFIT OR PROTECT IN BULL & BEAR MARKETS™

The Horizons BetaPro family of ETFsETF Ticker

Equities Bull+(+2x) Bear+ (-2x) Inverse (-1x)Single (+1x)BetaPro

S&P/TSX 60TM HXU HXD HIX HXT

BetaPro S&P/TSX Capped FinancialsTM HFU HFD HIF

BetaPro S&P/TSX Capped EnergyTM HEU HED HIE

BetaPro S&P/TSX Global GoldTM HGU HGD HIG

BetaPro S&P/TSX Global Base MetalTM HMU HMD

BetaPro S&P 500® HSU HSD HIU

BetaPro NASDAQ-100® HQU HQD

BetaPro MSCI Emerging Markets HJU HJD

Fixed Income Inverse (-1x) Single (+1x)

BetaPro U.S. Dollar HDU HDD

BetaPro U.S. 30-Year Bond HTU HTD

Commodities

BetaPro COMEX® Copper HKU HKD

BetaPro COMEX® Gold HBU HBD HUG

BetaPro COMEX® Silver HZU HZD HUZ

BetaPro NYMEX® Crude Oil HOU HOD HIO HUC

BetaPro NYMEX® Natural Gas HNU HND HIN HUN

Commodity spreads Spread (+1x) + (-1x)

BetaPro NYMEX® Long Crude Oil/Short Natural Gas Spread HON

BetaPro NYMEX® Long Natural Gas/Short Crude Oil Spread HNO

Underlying benchmarks

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THE S&P/TSX 60™ INDEX CANADA’S 60 LARGEST STOCKS

The 60 largest Canadian stocks by market capitalization

Represents 73%* of the market capitalization of the Canadian stock market

Currently about $25 billion** of Canadian investment assets are benchmarked to the S&P/TSX 60™ Index

The most widely invested in ETF benchmark in Canada, with securities there on currently representing more than $11 billion in assets and approximately 30% of all Canadian ETF assets

Typically these ETF securities are the most actively traded on the TSX

*Source: Standard and Poor’s as at August 2010. **Source: TD Securities

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INTRODUCING HXT: CANADA’S LOWEST COST ETF

Name: Horizons BetaPro S&P/TSX 60™ Index ETF (HXT:TSX)

Index: S&P/TSX 60™ Index (Total Return)

Management Fee: 7 basis points*

Operating Expenses: None

Quarterly Dividends: None; no dividend tax liability

*Plus applicable sales taxes

HOW LEVERAGED AND INVERSE LEVERAGED ETFs WORK

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HOW LEVERAGED AND INVERSE LEVERAGED ETFs WORK

Risk limited to capital invested Never lose more than principal invested

RSP eligible

CAD denominated Hedged back into CAD

Key attributes of leveraged ETFs

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INVERSE VS. SHORTING

Interest on short proceeds accrues to the NAV, not to Financial Institution

No margin calls

RSP Eligible

No call risk

No borrow rate

No cash coverage of dividends owing

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WHY WE REBALANCE

Limit risk to current amount invested

Same experience for everyone

No margin calls

Non-recourse leverage or exposure

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HXUy = 2.0007x + 4E-05

R2 = 0.9999

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

-12.00% -7.00% -2.00% 3.00% 8.00% 13.00%

% Change in Index

% C

han

ge

in E

TF

HXU CORRELATION TO BENCHMARK

Inception to Jul 30, 2010Source: Bloomberg

% Change in S&P/TSX 60™ Index

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HXD y = -2.0005x - 2E-05

R2 = 0.9998

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

-12.00% -7.00% -2.00% 3.00% 8.00% 13.00%

% Change in Index

% C

han

ge i

n F

un

dHXD CORRELATION TO BENCHMARK

Inception to Jul 30, 2010Source: Bloomberg

% Change in S&P/TSX 60™ Index

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UNIVERSAL EFFECTS OF COMPOUNDING ON INVESTMENT RETURNS

Compounding affects all investments over time Upward trending periods enhance returns Downward trending periods reduce losses

Volatile periods reduce returns and may increase losses

Positive and negative effects of compounding are magnified in leveraged and inverse funds The impact of compounding on a 2x leveraged fund is greater than 2x

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EXAMPLES OF COMPOUNDING ON INDEXES AND LEVERAGED FUNDS

-4%-1%-1%Compounded 2-day Return

20%10%-10%Day 2 Return

-20%-10%10%Day 1 Return

V O L A T I L E M A R K E T

44%21%-19%Compounded 2-day Return

20%10%-10%Day 2 Return

20%10%-10%Day 1 Return

D O W N W A R D T R E N D

-36%-19%21%Compounded 2-day Return

-20%-10%10%Day 2 Return

-20%-10%10%Day 1 Return

U P W A R D T R E N D

Daily ReturnDaily ReturnDaily Return 

-2x F U N D-1x F U N DI N D E X 

None of the returns shown contemplate fees or expenses; not actual returns, for illustrative purposes only.

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LEVERAGED AND INVERSE FUNDS AFFECTED BY RECORD VOLATILITY Highest short-term volatility levels for (S&P 500®) U.S. equities in 80 years affected all investments, including leveraged funds

Source: Bloomberg

0%

10%

20%

30%

40%

50%

60%

70%

80%

1928

1932

1936

1940

1944

1948

1952

1956

1960

1964

1968

1972

1976

1980

1984

1988

1992

1996

2000

2004

2008

2010

72% (12/16/08)

60% (1/11/88)69% ( 1 0/21/32)

66% (12/31/29)

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MARKETS: PAST AND PRESENTHISTORICAL MARKET CYCLES: DJIA 1900 - PRESENT

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MARKETS: PAST & PRESENTCURRENT MARKET CYCLE: DJIA 2000 - PRESENT

Source: Bloomberg.

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

31-Dec-99

23-Nov-0017-Oct-01

10-Sep-024-Aug-03

27-Jun-04

21-May-0514-Apr-06

8-Mar-0730-Jan-08

23-Dec-0816-Nov-09

10-Oct-10

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IMPACT OF VOLATILITY ON RETURNS OF BULL+ ETFsEstimated return over 1 year when the fund objective is to seek daily investment results, before fund fees and expenses and leverage costs, that correspond to twice (200%) the daily performance index.

‘Expected Returns’ = 200% One Year Index Performance. Source of Data: ProShare Advisors LLC

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INDEX VOLATILITY 2007 – 2010

*Data as of Oct. 18, 2010Source: Bloomberg

NYMEX® Natural Gas

NYMEX® Crude Oil

S&P 500® Index

S&P/TSX Global Gold IndexTM

S&P/TSX Capped Energy IndexTM

S&P/TSX Capped Financials IndexTM

S&P/TSX 60TM Index

 

62.10%

49.87%

27.28%

47.50%

39.21%

37.21%

27.28%

2009

47.03%

57.61%

41.05%

80.36%

60.22%

42.56%

41.46%

2008

44.83%

29.25%

15.95%

28.92%

19.81%

13.22%

14.90%

2007

36.53%

25.27%

17.23%

24.75%

17.49%

13.68%

12.31%

YTD 2010*

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HORIZONS BETAPRO ETFs PERFORMANCE SUMMARY*

HBP ETFs track (+/-2X, -1x) well on a daily basis

Over periods longer than a day, performance is market path dependent – focus on your economic exposure

Directional markets are favourable for performance: Earn greater than 2X, or lose less than -2X, -1x period returns

The greater the two-way volatility, the further performance will deviate (be worse) from +/-2X or -1x the period return

HBP Single Commodity ETFs (1x) track the daily and period performance of the rolling underlying futures contracts

HOW COMMODITY ETFs WORK

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HORIZONS BETAPRO COMMODITY ETFs

All HBP Commodity ETFs reference the futures contract of each of their respective commodities

All existing US dollar exposure is hedged back to Canadian dollars

None of the HBP Commodity ETFs hold the physical commodity

HUZHZDHZUCOMEX® Silver

HIN

HIC

Inverse

HKDHKUCOMEX ® Copper

HUGHBDHBUCOMEX® Gold

HUNHNDHNUNYMEX® Natural Gas

HUCHODHOUNYMEX® Crude Oil

SingleBear+Bull+Commodity

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IMPLICATIONS OF CONTANGO

Futures Curve in Contango

$58.00

$60.00

$62.00

$64.00

$66.00

$68.00

$70.00

$72.00

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Futures Contract Date

Pri

ce

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IMPLICATIONS OF BACKWARDATION

Futures Curve in Backwardation

$48.00

$50.00

$52.00

$54.00

$56.00

$58.00

$60.00

$62.00

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Futures Contract Date

Pri

ce

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UNDERLYING MARKET HOURS: E.S.T.

1:30 p.m8:20 a.mCOMEX® Gold

2:30 p.m9:00 a.mCOMEX® Silver

3:00 p.m8:20 a.mCAD Futures

8:20 a.m

9:00 a.m

9:00 a.m

9:30 a.m

Open Close

U.S. 30yr Bond Futures

NYMEX® Natural Gas

NYMEX® Crude Oil

ETFs

3:00 p.m

2:30 p.m

2:30 p.m

4:00 p.m

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ETF TRADING AND INVESTMENT STRATEGIES

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TRADING AND INVESTING STRATEGIES

Exchange Traded Funds provide flexibility to an investor for: Downside Protection

Hedge Existing Long Positions to dampen volatility

Alpha Generation Directional Plays or Pair Trading

Cash Equitization Instant market exposure or part of tax loss harvesting strategy

Beta Efficiency Index exposure with only 50% of capital requirement Enables a portable alpha strategy

Straddles Buy the pair of Long and Short ETFs in anticipation of a large, but unknown,

directional move up or down

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CASH EQUITIZATION

Use ETFs to gain immediate market exposure

Leveraged ETFs only require 50% of allocated capital

Liberates balance to invest in specific names at a specific price point

Gradually reduce Leveraged ETF exposure as individual stock positions are built

Tax loss harvesting

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DIRECTIONAL STRATEGY EXAMPLE

Source: Bloomberg

Oct. 2009 Nov. 2009 Dec 2009 Jan 2010 Feb. 2010 Mar. 2010 Apr. 2010 May 2010 Jun. 2010 Jul. 2010 Aug. 2010 Sept. 2010

HBU CN 149.20Gold Spot $/OZ 122.84

150

140

130

120

110

100

90

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PAIR TRADE STRATEGY EXAMPLE

Source: Bloomberg

Apr. 2010 May 2010 Jun. 2010 Jul. 2010 Aug. 2010 Sept. 2010

160

140

120

100

80

60

HBU CN 152.04HMU 90.02

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STRADDLE TRADE STRATEGY EXAMPLE

Performance

50

100

150

200

250

1-Apr-0927-Apr-09

23-May-09

18-Jun-0914-Jul-09

9-Aug-094-Sep-09

30-Sep-0926-Oct-09

21-Nov-09

17-Dec-09

12-Jan-107-Feb-10

5-Mar-10

31-Mar-10

26-Apr-10

22-May-10

4-Jun-10

%

HNU HND CMDYNGER Index

Source: Bloomberg

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SUMMARY

ETFs are: Efficient Cheaper Faster Relatively tax efficient

ETFs provide access to passive benchmarks and active strategies

ETFs are intelligent solutions for many investors

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DISCLAIMER

Horizons BetaPro Bull Plus and Bear Plus Exchange Traded Funds ("HBP Plus ETFs") use leveraged investment techniques that magnify gains and losses and result in greater volatility in value. Horizons BetaPro Spread Exchange Traded Funds (“HBP Spread ETFs”) which combine long and short exposure, also use leveraged investment techniques that magnify gains and losses and which may result in greater volatility in value. HBP Plus ETFs and HBP Spread ETFs are subject to leverage risk, and along with Horizons BetaPro Single Exchange Traded Funds ("HBP Single ETFs"), Horizons BetaPro Inverse Exchange Traded Funds ("HBP Inverse ETFs"), HBP Plus ETFs and HBP Spread ETFs (collectively, “HBP ETFs”) are subject to aggressive investment risk and price volatility risk, which are described in the HBP ETF’s prospectus. Each HBP Plus ETF seeks a return, before fees and expenses, that is either 200% or -200% of the performance of a specified underlying index, commodity or benchmark (the "target") for a single day. Each HBP Spread ETF seeks a return, before fees and expenses, that is the sum of 100% of the performance of one specified underlying target plus -100% of the performance of a second specified underlying target for a single day. Each HBP Single ETF or HBP Inverse ETF seeks a return that is 100% or - 100%, respectively, of the performance of a specified underlying target. Due to the compounding of daily returns, an HBP Plus ETF’s, HBP Spread ETF’s or HBP Inverse ETF’s, returns over periods other than one day will likely differ in amount and possibly direction from the performance of the specified underlying target(s) for the same period. Investors should monitor their holdings, as frequently as daily, to ensure that they remain consistent with their investment strategies. Commissions, management fees and expenses all may be associated with HBP ETFs. HBP ETFs are not guaranteed, their values change frequently and past performance may not be repeated. "Standard & Poor's®" and "S&P®" are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and "TSX®" is a registered trademark of the TSX Inc. (“TSX”). These marks have been licensed for use by BetaPro Management Inc. The HBP ETFs are not sponsored, endorsed, sold, or promoted by S&P or TSX and its affiliated companies and none of these parties make any representation, warranty or condition regarding the advisability of buying, selling and holding units/shares in the HBP ETFs. All trademarks/service marks are registered by their respective owners and licensed for use by BetaPro Management Inc. and none of the owners thereof or any of their affiliates sponsor, endorse, sell, promote or make any representation regarding the advisability of investing in HBP ETFs. Complete trademark and service-mark information is available at www.hbpetfs.com/pub/en/Trademark.aspx. Please read the prospectus before investing.

THANK YOU!