Horizons Robotics and Automation Index ETF (ROBO)Canada’s First Robotics and Automation ETF

www.HorizonsETFs.comInnovation is our capital. Make it yours.

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On November 29, 2017, Horizons ETFs Management (Canada) Inc. launched the Horizons Robotics and Automation Index ETF (which trades on the Toronto Stock Exchange under the ticker symbol “ROBO”). ROBO represents an innovative index strategy that gives investors exposure to the rapidly growing robotics and automation industry.

ROBO seeks to replicate the performance of the ROBO Global® Robotics and Automation Index (“the Index”). The Index is designed to provide exposure to the performance of equity securities of robotics-related and/or automation-related companies which are listed anywhere around the globe. ROBO invests in a physical portfolio of equity securities primarily comprising constituent issuers of the Index and seeks to hedge its U.S. currency exposure to the Canadian dollar at all times.

This ETF is a Canadian version of the ROBO Global Robotic and Automation ETF (which trades under the ticker symbol “ROBO” on the NASDAQ). The U.S. version of ROBO is the fastest-growing index ETF strategy in the world. On January 1, 2017, ROBO had U.S. $134.7 million in assets under management (“AUM”). As at October 31, 2017, it had nearly U.S. $1.7 billion in AUM.

What’s Driving this growth?Technological advancements in the processing power of semi-conductors have reached a point where microchips are relatively inexpensive to integrate into almost any type of technology. Doing so can dramatically increase the tasks that these technologies can perform.

Most of this technology is focused on key areas of automation, as industries seek to improve the amount of services they can offer, and reduce the overall cost of production by turning to various forms of automation.

Horizons Robotics and Automation Index ETF (ROBO)

ETF Snapshot Name: Horizons Robotics and Automation Index ETF

Launch Date: November 29, 2017

CUSIP: 44053Q106

Ticker: ROBO

Bloomberg Ticker: ROBOTR

Underlying Index: ROBO Global® Robotics and Automation Index

Management Fee: 0.75% (plus applicable sales tax)

Investment Manager: Horizons ETFs Management (Canada) Inc.

Distribution Frequency: Annually, if any

Eligibility: All registered and non-registered investment accounts

Currency: All USD exposure is hedged back to Canadian dollars

global robotics technology marketAs the chart below highlights, there is substantial impact to many industries through the increased use of robotics.

Source: Allied Market Research, May 2015.

A recent study by PwC concluded that the market for artificial intelligence (“A.I.”), which is the capability of a machine to imitate intelligent human behavior, could result in an additional U.S. $15.7 trillion in global economic output by 2030.

Source: Sizing the Prize – PwC’s Global Artificial Intelligence Study, www.pwc.com/ai, April 2017.

Horizons Robotics and Automation Index ETF (ROBO)

This type of technology is more than just transformative – it might

be the single-biggest driver of economic growth of our lifetime. In aggregate,

it represents a potential U.S. $1.2 trillion revenue opportunity by 2025…““

Horizons Robotics and Automation Index ETF (ROBO)

This type of technology is seen as more than just transformative – it might be the single-biggest driver of economic growth in our lifetime. In aggregate, it represents a potential U.S. $1.2 trillion revenue opportunity by 2025, according to Myria Research.

Source: Myria Research.

Generally, investors have very low exposure to stocks that deal directly in the development of robotics and automation. Most investors are familiar with large users of automation and A.I. technology, such as Google and Amazon. But what about the companies that are actually building this type of technological infrastructure?

Very few of these names are widely known, and even less are widely held by investors. In fact, in the MSCI All-World Country Index, which is the benchmark large-cap equity index for the world, less than 2% of the companies listed in the Global® Robotics and Automation Index are also found in that index.

Investors would therefore need to directly seek out exposure to these technology companies and the Global® Robotics and Automation Index is one of the only index solutions in the world offering direct exposure to this rapidly growing segment of the global economy.

Horizons Robotics and Automation Index ETF (ROBO)

Most investors are familiar with large users of automation

and A.I. technology, such as Google and Amazon.

But what about the companies that are actually building this type

of technological infrastructure?

““Horizons Robotics and Automation Index ETF (ROBO)

The robo Global® Robotics and Automation Index The ROBO Global® Robotics and Automation Index (“the Index”) is comprised of over 80 stocks focusing on the entire robotics and automation industry. The stocks include rapidly developing companies from around the world with listings on multiple foreign and domestic exchanges in over 14 different countries across 12 sub-sectors. As a rules-based Index, it employs specific investment criteria focused on companies that derive a portion of revenues and profits from robotics-related and/or automation-related products and/or services. The Index is rebalanced on a quarterly basis with bellwether companies receiving a higher weight compared to non-bellwether companies. Within each of these segments, the stocks are equally weighted. (Bellwether stocks are companies which derive the majority of their revenues from robotics and automation or are a market share leader.)

A key differentiator of the Index versus other indices, is the team behind its creation – ROBO Global. ROBO Global is focused solely on research and analysis of robotics and automation companies. The Index was designed by a group of researchers and industry leaders who are recognized global experts.

To give some context to how extensive their expertise is, the Index has an advisory board that includes five members with PhDs, many of whom are globally recognized researchers in A.I. and robotics, and in some cases, successful owners of engineering and robotics firms themselves.

Finding stocks that derive significant revenues from robotics and automation is, in itself, a big challenge. Through the expertise of its leadership team and strategic advisors, ROBO Global searches worldwide to find cutting-edge companies in robotics and automation technologies. From healthcare to industrials to aerospace, these companies span across a broad array of industries. By identifying these prospects, the team at ROBO Global is able to track and invest in the global growth of the industry through the Index.

How is the Index Constructed? ROBO Global creates and maintains a unique and broad database of companies across the globe which have at least a portion of their business and revenue associated with robotics and automation. This database has over one decade of history and captures the entire value chain of robotics, automation, A.I. and other enabling technologies specific to the industry.

Within this database, ROBO Global has built industry classifications and subsectors designed to reflect the different areas of growth and focus within the robotics, automation and A.I. industries.

These sub-sectors are intended to capture companies throughout the “value chain”. The value chain includes not just the manufacturing and deployment of robots and automated systems, but also enabling technologies such as sensing, computing, software and motion control, among others.

Each sub-sector is within two key classification criteria: (1) either the companies are involved in Technology, designing and building robotics, A.I. or automation systems; or (2) they are part of Application classification, which are companies actively deploying automation, A.I. or robotics.

Horizons Robotics and Automation Index ETF (ROBO)

robo classification System

Horizons Robotics and Automation Index ETF (ROBO)

TECHNOLOGY

Sensing • Sensor technology

Actuation • Integration – Robotic limbs (hydraulic robotic arms)

Computing • Computer processing, A.I.

Integration• Combining sensor, actuation

and computing together

APPLICATIONS

Industrial Manufacturing • Factor robots, co-bots

3D Printing• additive manufacturing,

prototyping

Healthcare • Surgical robots, exoskele-

tons

Energy• Remotely operated vehicles

Food & Agriculture• Farming robots, self-driving

tractors

Security• UAVs, rescue robots

Logistics Automation• Material Handling,

warehouse robots

Consumer products • Drones, home automation

Bellwether / Non-bellwetherAfter companies have been put into their respective sub-sectors, they are divided up into sub-classifications known as “bellwether” or “non-bellwether” companies.

“Bellwether” companies are well-established, whose core business is directly related to robotics and automation. They typically operate on a global scale. These firms are also referred to as “pure plays”. “Non-bellwether” companies have a distinct portion of their business and revenue in robotics and automation and have the potential to grow within this space through innovation and/or market-adoption of their products and/or services.

Each bellwether stock is given an equal weight of approximately 2% in the Index; whereas each non-bell-wether stock is given an approximate 1% weighting in the Index. The Index is rebalanced back to these equal-weighted buckets on a quarterly basis.

weighting system

Horizons Robotics and Automation Index ETF (ROBO)

Source: ROBO Global.

List of eligible etfsIt’s important to highlight that while very few of the companies in the Index overlap broader indices, they are still sizable. The stocks selected for the Index are companies that are already well-established in robotics, automation and/or A.I. and have developed global supply chain relationships. The Index does not invest in start-ups or early-stage companies.

This is a key distinction between other strategies in this space. Many of these companies have established revenue streams, so fundamental balance sheet analysis can be conducted on them as well as analysis for a clear valuation. This differs greatly from other early transformative periods in technology investing (such as early-internet stock investing) where there were no clearly identified revenue streams – only revenue potential.

Key Reasons to Own robo • Growth Opportunity: Gain exposure to one of the fastest-growing segments of the global economy• Diversification: Little overlap in holdings with major broad stock indices and significant exposure to

non-North American stocks• Innovative Index Design: Stocks selected using a rigorous research process overseen by an advisory

panel with extensive expertise • Currency hedged: All U.S. dollar exposure is currency hedged, making it a more currency efficient

strategy for Canadian investors• Takeover Premiums: Companies about to experience corporate takeovers typically see their stock

value increase. There have been eight takeovers and four additional takeover attempts since the inception of the Index in August of 20131

1Source: ROBO Global.

Horizons Robotics and Automation Index ETF (ROBO)

The stocks selected for the index are companies that are already

well-established in robotics, automation and A.I. and have

developed global supply chain relationships.

The index does not invest in start-ups or early-stage companies.

““Horizons Robotics and Automation Index ETF (ROBO)

www.HorizonsETFs.comInnovation is our capital. Make it yours.

HorizonsETFs.com/ROBO

Horizons ETFs is a member of Mirae Asset Global Investments. Commissions, management fees and expenses all may be associated with an investment in the Horizons Robotics and Automation Index ETF managed by Horizons ETFs Management (Canada) Inc. (the “ETF”). The ETF is not guaranteed, its values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the ETF. Please read the prospectus before investing. 17-565 1117_H