Universa Hedge Fund Prospectus

8/11/2019 Universa Hedge Fund Prospectus

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No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim

otherwise. This prospectus constitutes a public offering of these securities only in those jurisdictions where they may

be lawfully offered for sale and only by persons permitted to sell these securities.

PROSPECTUS

Continuous Offering May 2, 2013

Horizons Universa Canadian Black Swan ETF (“Horizons HUT”)

Horizons Universa US Black Swan ETF (“Horizons HUS.U”)(together, the “ETFs” and individually, an “ETF”)

The Horizons ETFs are exchange-traded mutual funds and consist in total of 74 open-end mutual fund trustsestablished under the laws of Ontario, two of which are offered pursuant to this prospectus. Class E units (“Class E

Units”) and advisor class units (“Advisor Class Units”, together with the Class E Units, the “Units”) of each ETFare being offered for sale on a continuous basis by this prospectus and there is no minimum number of Units of anETF that may be issued. The Units of each ETF are offered for sale at a price equal to the net asset value of suchUnits next determined following the receipt of a subscription order.

Units of the ETFs are listed and trade on the Toronto Stock Exchange (the “TSX”). The net asset value per Unit ofHorizons HUS.U is only calculated in U.S. dollars and Units of Horizons HUS.U only trades on the TSX in U.S.dollars.

The manager and trustee of the ETFs is AlphaPro Management Inc. (“AlphaPro”, the “Manager” or the“Trustee”). The Manager has retained its affiliate Horizons Investment Management Inc. (the “Investment

Manager”) to act as investment manager of the ETFs. The Investment Manager is also responsible for engaging theservices of Universa Investments L.P. (the “Sub-Advisor”), a limited partnership organized under the laws of theState of Delaware, to act as the sub-advisor to the ETFs, and to make and execute certain investment decisions, on behalf of the ETFs. See “Organization and Management Details of the ETFs” at page 43.

Investment Objectives

Horizons HUT

The investment objective of Horizons HUT is to provide Unitholders with exposure to (a) the performance of the

S&P/TSX 60 Index™ through a portfolio of equity securities and/or index funds and (b) an actively managed basketof put and call options (the “Cdn Black Swan Overlay”) that seeks to provide protection from significant marketdeclines over rolling one-month periods and seeks to reduce the overall volatility of returns of Horizons HUT.

Horizons HUS.U

The investment objective of Horizons HUS.U is to provide Unitholders with exposure to (a) the performance of theS&P 500® through a portfolio of equity securities and/or index funds and (b) an actively managed basket of put andcall options (the “US Black Swan Overlay”) that seeks to provide protection from significant market declines overrolling one-month periods and seeks to reduce the overall volatility of returns of Horizons HUS.U. HorizonsHUS.U will not seek to hedge its exposure to the U.S. dollar back to the Canadian dollar.



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See “Investment Objectives” at page 15. Also see “Investment Strategies” at page 16.

Investors can buy or sell Units of an ETF on the TSX in the applicable currency through registered brokers anddealers in the province or territory where the investor resides. Units of HUS.U will only be offered in U.S. dollars. Investors will incur customary brokerage commissions in buying or selling Units. The Manager, on behalf of eachETF, has entered into and may enter into agreements with registered dealers (each a “ Designated Broker” or“Dealer”) which, amongst other things, enables such Designated Brokers and Dealers to purchase and redeem Unitsin the applicable currency directly from the ETFs. Holders of Units of an ETF (the “Unitholders”) will be able toredeem Units in the applicable currency in any number for cash at a redemption price of 95% of the closing price forthe Unit in the applicable currency on the TSX on the effective day of redemption. Unitholders are advised toconsult their brokers or investment advisers before redeeming Units for cash. Each ETF will also offer additionalredemption or exchange options which are available where a Dealer, Designated Broker or Unitholder redeems a prescribed number of Units (a “PNU”). See “Exchange and Redemption of Units” at page 34.

Each ETF will issue Units directly to Designated Brokers and Dealers.

No Designated Broker and/or Dealer has been involved in the preparation of this prospectus nor has any DesignatedBroker and/or Dealer performed any review of the contents of this Prospectus and the Securities RegulatoryAuthorities (as hereafter defined) have provided the ETFs with a decision exempting the ETFs from the requirementto include a certificate of an underwriter in the prospectus. The Designated Brokers and Dealers are not underwritersof the ETFs in connection with the distribution by the ETFs of its Units under this prospectus.

The values of most securities, in particular equity securities, change with stock market conditions, which areaffected by general economic and market activity. While seeking to provide protection from significant marketdeclines, the use of options may, however, limit potential gains available to an ETF. For a discussion of these risks

and other risks associated with an investment in Units of an ETF, see “Risk Factors” at page 22.

Registrations and transfers of Units will be effected only through the book-entry only system administered by CDSClearing and Depository Services Inc. Beneficial owners will not have the right to receive physical certificatesevidencing their ownership.

While each ETF will be a mutual fund under the securities legislation of certain provinces and territories of Canada,each ETF is entitled to rely on exemptive relief from certain provisions of Canadian securities legislation applicable

to conventional mutual funds. The ETFs do not issue index participation units.

THESE BRIEF STATEMENTS DO NOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT

ASPECTS OF INVESTING IN AN ETF. AN INVESTOR SHOULD CAREFULLY READ THIS

PROSPECTUS, INCLUDING THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THE ETFS

AT PAGE 22, BEFORE INVESTING IN AN ETF.

Additional information about an ETF is or will be available in the most recently filed annual financial statementstogether with the accompanying auditors’ report, any filed interim financial statements filed after those annualfinancial statements, and annual and interim management reports of fund performance, of an ETF. These documentsare or will be incorporated by reference into this prospectus which means that they legally form part of this prospectus. For further details, see “Documents Incorporated by Reference” at page 66.

You can get a copy of these documents at your request, and at no cost, by calling the Manager toll-free at 1-866-641-5739 or from your dealer. These documents are or will also be available on the Manager’s website atwww.HorizonsETFs.com, or by contacting the Manager by e-mail at [email protected]. These documents andother information about the ETFs are also available on the website of SEDAR (the System for Electronic DocumentAnalysis and Retrieval) at www.sedar.com.

AlphaPro Management Inc.

26 Wellington St. East, Suite 700

Toronto, Ontario M5E 1S2

Tel: 416-933-5745

Fax: 416-777-5181

Toll Free: 1-866-641-5739



TABLE OF CONTENTS

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PROSPECTUS SUMMARY ................................... 1 GLOSSARY ........................................................... 11 OVERVIEW OF THE LEGAL

STRUCTURE OF THE ETFs .............................. 15 INVESTMENT OBJECTIVES ............................15

INVESTMENT STRATEGIES ............................16 OVERVIEW OF THE SECTORS THAT

THE ETFs INVEST IN .........................................19 S&P/TSX 60™ Index ..............................................19 S&P 500® ................................................................19 The Indices ............................................................... 19 INVESTMENT RESTRICTIONS .......................19 General ..................................................................... 19 Tax Related Investment Restrictions .......................20 FEES AND EXPENSES ........................................ 20 Fees and Expenses Payable by the ETFs .................20 Fees and Expenses Payable Directly by theUnitholders ..............................................................22

ANNUAL RETURNS ANDMANAGEMENT EXPENSE RATIOS ............... 22 RISK FACTORS ...................................................22 Stock Market Risk ................................................... 22 Use of Options Risk .................................................22 Index Risks ..............................................................23 Derivatives Risk ....................................................... 23 Universa BSPP Overlay Risk ................................... 24 No Assurance of Meeting InvestmentObjectives ................................................................ 24 Complexity ..............................................................24 Market Conditions ...................................................24 Low Volatility Risk ................................................. 25 Foreign Currency Risk – Horizons HUS.U ..............25 Reliance on Key Personnel ......................................25 Specific Issuer Risk .................................................25 Regulatory Risk ....................................................... 25 Sub-Advisor Risk .....................................................25 Corresponding Net Asset Value Risk ...................... 26 Designated Broker/Dealer Risk ...............................26 Cease Trading of Securities Risk .............................26 Exchange Risk ......................................................... 26 Early Closing Risk ...................................................26 Trade Errors ............................................................. 26 Tax Risk ...................................................................26 Securities Lending, Repurchase and ReverseRepurchase Transaction Risk ...................................28

Liability of Unitholders ............................................28 Foreign Stock Exchange Risk – HorizonsHUS.U ..................................................................... 28 Conflicts of Interest .................................................29 Redemption Price ..................................................... 29 Significant Redemptions ..........................................29 No Guaranteed Return .............................................29 Loss of Limited Liability .........................................29 Market for Units .......................................................30

No Ownership Interest .............................................30 DISTRIBUTION POLICY ................................... 30 Distribution Reinvestment Plan ...............................30 PURCHASES OF UNITS .....................................32 Issuance of Units of an ETF .....................................32

Buying and Selling Units of an ETF ........................ 33 EXCHANGE AND REDEMPTION OF

UNITS ..................................................................... 34 Book-Entry Only System .........................................36 Short-Term Trading ................................................. 37 PRIOR SALES ....................................................... 37 Trading Price and Volume ....................................... 37 INCOME TAX CONSIDERATIONS .................. 38 Status of the ETFs .................................................... 39 Taxation of the ETFs ...............................................39 Taxation of Unitholders ...........................................41 Taxation of Registered Plans ...................................42 Tax Implications of the ETF’s Distribution

Policy .......................................................................42 ORGANIZATION AND

MANAGEMENT DETAILS OF THE

ETFs ........................................................................43 Manager of the ETFs ............................................... 43 Officers and Directors of the Manager ..................... 43 Duties and Services to be Provided by theManager ...................................................................45 Investment Manager.................................................46 Certain Officers and Directors of theInvestment Manager.................................................46 Details of the Investment ManagementAgreement ................................................................ 46 Duties and Services to be Provided by theSub-Advisor .............................................................47 Details of the Sub-Advisory Agreement .................. 49 Designated Brokers ..................................................49 Conflicts of Interest .................................................50 Independent Review Committee ..............................51 The Trustee .............................................................. 51 Custodian ................................................................. 52 Valuation Agent .......................................................52 Auditors ...................................................................52 Registrar and Transfer Agent ...................................52 Promoter ..................................................................53 Accounting and Reporting ....................................... 53 CALCULATION OF NET ASSET

VALUE ...................................................................53 Valuation Policies and Procedures of theETFs .........................................................................53 Reporting of Net Asset Value .................................. 55 ATTRIBUTES OF THE SECURITIES .............. 55 Description of the Securities Distributed .................55 Exchange of Units for Baskets of Securities ............56 Redemption of PNU(s) for Cash .............................. 56



TABLE OF CONTENTS (continued)

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Redemption of Units for Cash pursuant to aSystematic Withdrawal Plan ....................................56 Redemptions of Units for Cash ................................56 Conversion of Units ................................................. 56 Modification of Terms ............................................. 56

Voting Rights in the Portfolio Securities .................56 UNITHOLDER MATTERS ................................. 57 Meetings of Unitholders ..........................................57 Matters Requiring Unitholder Approval .................. 57 Amendments to the Trust Declaration .....................58 Reporting to Unitholders ..........................................59 Non-Resident Unitholders .......................................59 TERMINATION OF THE ETFs .........................59 Procedure on Termination ........................................60 PLAN OF DISTRIBUTION ................................. 60 BROKERAGE ARRANGEMENTS .................... 60 RELATIONSHIP BETWEEN THE ETFs

AND DEALERS ..................................................... 60

PRINCIPAL HOLDERS OF UNITS OFTHE ETFs .............................................................. 61 PROXY VOTING DISCLOSURE FOR

PORTFOLIO UNITS HELD ................................61 MATERIAL CONTRACTS ................................. 63 LEGAL AND ADMINISTRATIVE

PROCEEDINGS .................................................... 63 EXPERTS ............................................................... 64 EXEMPTIONS AND APPROVALS ................... 64 OTHER MATERIAL FACTS .............................. 64 Management of the ETF ..........................................64 Index Information ....................................................64 PURCHASERS’ STATUTORY RIGHTS

OF WITHDRAWAL AND RESCISSION .......... 66 DOCUMENTS INCORPORATED BY

REFERENCE ........................................................66 CERTIFICATE OF THE ETFs,

MANAGER AND PROMOTER ..........................68



PROSPECTUS SUMMARY

The following is a summary of the principal features of Units of the distribution and should be read together with

the more detailed information, financial data and financial statements contained elsewhere in this prospectus or

incorporated by reference in this prospectus. Capitalized terms not defined in this summary are defined in the

Glossary.

The ETFs The Horizons ETFs consist in total of 74 mutual fund trusts established under thelaws of Ontario, two of which, Horizons HUT and Horizons HUS.U, are offered pursuant to this prospectus. See “Overview of the Legal Structure of the ETFs”at page 15.

Investment Objectives Horizons HUT

The investment objective of Horizons HUT is to provide Unitholders withexposure to (a) the performance of the S&P/TSX 60 Index™ through a portfolioof equity securities and/or index funds and (b) an actively managed basket of putand call options (the “Cdn Black Swan Overlay”) that seeks to provide protection from significant market declines over rolling one-month periods and

seeks to reduce the overall volatility of returns of Horizons HUT.

Horizons HUS.U

The investment objective of Horizons HUS.U is to provide Unitholders withexposure to (a) the performance of the S&P 500® through a portfolio of equitysecurities and/or index funds and (b) an actively managed basket of put and calloptions (the “US Black Swan Overlay”) that seeks to provide protection fromsignificant market declines over rolling one-month periods and seeks to reducethe overall volatility of returns of Horizons HUS.U. Horizons HUS.U will not seek to hedge its exposure to the U.S. dollar back to the Canadian dollar.

See “Investment Objectives” at page 15.

Investment Strategies Investment Philosophy of the Sub-Advisor

The Sub-Advisor is an investment management firm that specializes in exploitingcertain low-probability market events (“Tails” or “Black Swans”) that aremispriced in the financial markets by taking positions where the mispricing is thegreatest. This approach is designed to be more sensitive to extreme market eventsand less sensitive to general market activity. The Sub-Advisor’s investment philosophy has been refined over a decade of implementation and developmentof its protection strategies, creating an innovative investment niche and riskmanagement methodology.

The Sub-Advisor’s approach arises from a long-term specialization in extremeevents such as Tails, where the Sub-Advisor offers a unique combination ofdecades of focused options trading experience and technical expertise.

The Sub-Advisor derives a competitive edge through its ability to invest the CdnBlack Swan Overlay and the US Black Swan Overlay (the “Universa BSPP

Overlays”) in a manner that is substantially different than the portfolio protectionoffered through more traditional options strategies or other risk managementstrategies. The Sub-Advisor distinguishes itself through a focused and disciplinedinvestment approach, which seeks to:

achieve increasingly greater returns in the event of correspondinglysevere market declines;

employ empirical and fundamental-based option valuation;



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Offering Each ETF offers two classes of units: Class E units (the “Class E Units”); andadvisor class units (the “Advisor Class Units”, together with the Class E Units,the “Units”). The ETFs do not issue index participation units.

Units of the ETFs are listed and trade on the TSX. The net asset value per Unit

of Horizons HUS.U is only calculated in U.S. dollars and Units of HorizonsHUS.U only trades on the TSX in U.S. dollars.

The only difference between Class E Units and Advisor Class Units of an ETF isthat a higher Management Fee is charged to the Advisor Class and such higherfee reflects the Service Fee paid to registered dealers by the Manager. NoService Fee is paid to registered dealers in respect of Class E Units. See “Feesand Expenses Payable by the ETFs” at page 20. As a result, the net asset value per Class E Unit of an ETF will not be the same as the net asset value perAdvisor Class Unit of that ETF.

See “Fees and Expenses Payable by the ETFs” at page 20.

Units of each ETF are offered for sale on a continuous basis by this prospectus,and there is no minimum number of Units of an ETF that may be issued. The

Units are offered for sale at a price equal to the net asset value of the Units nextdetermined following the receipt of a subscription order.

See “Plan of Distribution” at page 60.

Brokerage Arrangements Subject to the prior written approval of the Manager, the Investment Manager isauthorized to establish, maintain, change and close brokerage accounts on behalfof the ETFs.

Special Considerations for

Purchasers

The provisions of the so-called “early warning” requirements set out in Canadiansecurities legislation do not apply in connection with the acquisition of Units ofan ETF. In addition, each ETF has obtained exemptive relief from the SecuritiesRegulatory Authorities to permit a Unitholder of that ETF to acquire more than20% of the Units of that ETF through purchases on the TSX without regard to thetakeover bid requirements of applicable Canadian securities legislation, provided

that such Unitholder, and any person acting jointly or in concert with suchUnitholder, undertakes to the Manager not to vote more than 20% of the Units ofthat ETF at any meeting of Unitholders of that ETF.

See “Attributes of the Securities - Description of the Securities Distributed” at page 55.

Market participants are permitted to sell Units of an ETF short and at any pricewithout regard to the restrictions of the Universal Market Integrity Rules thatgenerally prohibit selling securities short on the TSX unless the price is at orabove the last sale price.

See “Attributes of the Securities - Description of the Securities Distributed” at page 55.

Distributions and AutomaticReinvestment

The ETFs anticipate making distributions, if any, to their Unitholders on aquarterly basis. Distributions are not fixed or guaranteed but when available will be paid in cash, unless a Unitholder is participating in the Reinvestment Plan.

To the extent any ETF has not distributed the full amount of its net income(including net realized capital gains) for tax purposes in any given year, thedifference between such amount and the amount actually distributed by the ETFwill be paid at year end as a “reinvested distribution” unless the CDS Participant,on behalf of an investor, requests cash, in writing, at least 10 business days priorto the dividend declaration date.

Advisor Class Units of each ETF pay higher management fees and, as a result,



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any distributions payable on the Advisor Class Units are generally expected to beless than the distributions payable on Class E Units of the same ETF.

As the net asset value per Unit of Horizons HUS.U is only calculated in U.S.dollars and Units of Horizons HUS.U only trades on the TSX in U.S. dollars, alldistributions from Horizons HUS.U will be paid in U.S. dollars.

See “Distribution Policy” at page 30.

Distribution Reinvestment At any time, a Unitholder of an ETF may elect to participate in the ReinvestmentPlan by contacting the CDS Participant(s) through which the Unitholder holds itsUnits. Under the Reinvestment Plan, cash distributions will be used to acquireadditional Units in the market or from treasury and will be credited to the accountof the Unitholder through CDS. See “Distributions Policy – DistributionReinvestment Plan” on page 30.

Conflicts of Interest The ETFs are subject to certain conflicts of interest. The Manager and theInvestment Manager are affiliated and Units may be sold by dealers that arerelated to the Manager. In addition, an affiliate of NBF holds a minority interestin the Manager. See “Organization and Management Details of the ETFs -Conflicts of Interest” at page 50 and see “Relationship between the ETFs andDealers” on page 60.

Redemptions In addition to the ability to sell Units of the ETFs on the TSX or redeem pursuantto a systematic withdrawal plan, Unitholders of the ETFs may redeem Units forcash at a redemption price per Unit equal to 95% of the closing price for theUnits on the TSX on the effective day of the redemption, where the Units beingredeemed are not equal to a PNU or a multiple PNU. Unitholders may redeem aPNU of an ETF or a multiple PNU of an ETF for cash equal to the net asset valueof that number of Units, subject to any redemption charge.

Because Unitholders will generally be able to sell Units at the market price on theTSX through a registered broker or dealer, subject only to customary brokeragecommissions, Unitholders are advised to consult their brokers, dealers orinvestment advisors before redeeming their Units for cash.

The ETFs will also offer additional redemption or exchange options which areavailable where a Dealer, Designated Broker or Unitholder redeems or exchangesa PNU.

Provided applicable requirements are met, Unitholders may convert AdvisorClass Units for Class E Units of the same ETF or may convert Class E Units forAdvisor Class Units of the same ETF, in each case on a monthly basis.

See “Exchange and Redemption of Units” at page 34.

Income Tax Considerations A Unitholder of an ETF will generally be required to include, in computingincome for a taxation year, the amount of income (including any taxable capitalgains) that is paid or becomes payable to the Unitholder by that ETF in that year(including such income that is reinvested in additional Units of the ETF).

A Unitholder who disposes of a Unit of an ETF that is held as capital property,including on a redemption or otherwise, will realize a capital gain (or capitalloss) to the extent that the proceeds of disposition (other than any amount payable by the ETF which represents an amount that is otherwise required to be includedin the Unitholder’s income), net of costs of disposition, exceed (or are less than)the adjusted cost base of the Unit of the ETF.

Pursuant to the Trust Declaration, an ETF may allocate and designate any incomeor capital gains realized by the ETF as a result of any disposition of property ofthe ETF undertaken to permit or facilitate the redemption or exchange of Units toa Unitholder whose Units are being redeemed or exchanged. In addition, an ETF



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has the authority to distribute, allocate and designate any income or capital gainsof the ETF to a Unitholder who has redeemed Units of the ETF during a year inan amount equal to the Unitholder’s share, at the time of redemption, of theETF’s income and capital gains for the year or such other amount that isdetermined by the ETF to be reasonable.

Each investor should satisfy himself or herself as to the federal and provincial tax

consequences of an investment in Units of an ETF by obtaining advice from hisor her tax advisor.

See “Income Tax Considerations” at page 38.

Eligibility for Investment Provided that an ETF qualifies as a “mutual fund trust” within the meaning of theTax Act, or the Units of the ETF are listed on a “designated stock exchange”within the meaning of the Tax Act, Units of that ETF will be qualifiedinvestments under the Tax Act for a trust governed by a registered retirementsavings plan, a registered retirement income fund, a registered disability savings plan, a deferred profit sharing plan, a registered education savings plan or a tax-free savings account.

Documents Incorporated by

Reference

Additional information about the ETFs is or will be available in the most recentlyfiled annual and interim financial statements, together with the accompanying

auditor’s reports, of each ETF and the most recently filed annual and interimmanagement report of fund performance of each ETF. These documents are orwill be incorporated by reference into this prospectus. Documents incorporated by reference into this prospectus legally form part of this prospectus just as ifthey were printed as part of this prospectus. These documents are or will be publicly available on the website of the Manager at www.HorizonsETFs.com andmay be obtained upon request, at no cost, by calling toll-free 1-866-641-5739 or by contacting your dealer. These documents and other information about theETFs are will also be publicly available at www.sedar.com. See “DocumentsIncorporated by Reference” at page 66.

Termination The ETFs do not have a fixed termination date but may be terminated at thediscretion of the Manager in accordance with the terms of the Trust Declaration.See “Termination of the ETFs” at page 59.

Risk Factors An investment in Units of an ETF will be subject to certain risks. The risk factors particular to the ETFs are set out in the list below. Prospective investors shouldconsider the risks particular to the ETFs in which they are considering investing,among others, before investing in Units of an ETF.

stock market risk use of options risk index risks derivatives risks

Universa BSPP Overlay risk no assurance of meeting investment objectives complexity market conditions

low volatility risk

foreign currency risk (Horizons HUS.U) reliance on key personnel specific issuer risk regulatory risk sub-advisor risk corresponding net asset value risk designated broker/dealer risk

cease trading or securities risk exchange risk



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early closing risk trade errors tax risk

securities lending, repurchase and reverse repurchase transaction risk

liability of Unitholders foreign stock exchange risk (Horizons HUS.U) conflicts of interest

redemption price significant redemptions no guaranteed return loss of limited liability market for Units no ownership interest

See “Risk Factors” at page 22.

Organization and Management of the ETFs

The Manager and Trustee AlphaPro, a corporation incorporated under the laws of Canada, is the managerand trustee of the ETFs. The Manager is responsible for providing or arranging

for the provision of administrative services required by the ETFs. The principaloffice of AlphaPro is 26 Wellington Street East, Suite 700, Toronto, Ontario,M5E 1S2.

AlphaPro is a subsidiary of Horizons. The Horizons ETFs family includes a broadly diversified range of investment tools with solutions for investors of allexperience levels. AlphaPro and Horizons are subsidiaries of Mirae Asset GlobalInvestments Co., Ltd. (“Mirae Asset”). An affiliate of NBF also holds aminority interest in AlphaPro.

Mirae Asset is the Korea-based asset management entity of Mirae AssetFinancial Group, one of the world's largest investment managers in emergingmarket equities. With over 560 employees, including more than 80 investment professionals (as of January 31, 2013), Mirae Asset has a presence in Australia,Brazil, Canada, China, Colombia, Hong Kong, India, Korea, Taiwan, the UnitedKingdom, the United States, and Vietnam. Headquartered in Seoul, South Korea,Mirae Asset manages approximately US$57.2 billion in assets globally as ofJanuary 31, 2013.

See “Organization and Management Details of the ETFs – Manager of the ETFs”on page 43.

Investment Manager Horizons Investment Management Inc. (the “Investment Manager”), acorporation incorporated under the laws of Ontario, is the investment manager ofthe ETFs and an affiliate of the Manager. Investment advisory and portfoliomanagement services will be provided to the ETFs by the Investment Manager.The Investment Manager is a subsidiary of Mirae Asset. The principal office ofthe Investment Manager is at 26 Wellington Street East, Suite 608, Toronto,Ontario M5E 1S2.

See “Organization and Management Details of the ETFs – Investment Manager”on page 46.

Sub-Advisor Universa Investments L.P. has been appointed sub-advisor of each of the ETFs.The Sub-Advisor has been retained by the Investment Manager to make andexecute investment decisions on behalf of the ETFs. The Sub-Advisor isregistered as an investment adviser with the U.S. Securities and ExchangeCommission, a commodity trading adviser with the Commodity Futures TradingCommission and is a member of the National Futures Association. The Sub-Advisor is a limited partnership organized under the laws of the State of



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Delaware. The Sub-Advisor is independent of the Manager. The principal officeof the Sub-Advisor is located at 1414 Second Street, Santa Monica, California,U.S.A. See “Organization and Management Details of the ETFs – Duties andServices to be Provided by the Sub-Advisor” on page 47.

Custodian CIBC Mellon Trust is the custodian of the ETFs and is independent of theManager. CIBC Mellon Trust provides custodial services to the ETFs and is

located in Toronto, Ontario.

See “Organization and Management Details of the ETFs – Custodian” on page 52.

Valuation Agent CIBC Mellon Global has been retained to provide accounting services in respectof the ETFs. CIBC Mellon Global is located in Toronto, Ontario.

See “Organization and Management Details of the ETFs – Valuation Agent” on page 52.

Auditors KPMG LLP is responsible for auditing the annual financial statements of theETFs. The auditors are independent of the Manager. The head office of KPMGLLP is located in Toronto, Ontario.

See “Organization and Management Details of the ETFs – Auditors” on page 52.

Registrar and Transfer Agent CIBC Mellon Trust, at its principal offices in Toronto, Ontario is also theregistrar and transfer agent for Units of the ETFs pursuant to registrar andtransfer agency agreements. CIBC Mellon Trust is independent of the Manager.

See “Organization and Management Details of the ETFs – Registrar and TransferAgent” on page 52.

Promoter The Manager is also the promoter of the ETFs. The Manager took the initiativein founding and organizing the ETFs and is, accordingly, the promoter of theETFs within the meaning of securities legislation of certain provinces andterritories of Canada.

See “Organization and Management Details of the ETFs – Promoter” on page 53.

Summary of Fees and Expenses

Set out below is a summary of the fees and expenses payable by the ETFs, and the fees and expenses thatUnitholders may have to pay if they invest in the ETFs. Unitholders may have to pay some of these fees andexpenses directly. Alternatively, each ETF may have to pay some of these fees and expenses, which will thereforereduce the value of an investment in that ETF.



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Fees and Expenses Payable by the ETFs

Type of Charge Description

Management Fee Each ETF pays Management Fees to the Manager equal to: (i) an annual percentage of the net asset value of Class E Units; and (ii) an annual percentage ofthe net asset value of the Advisor Class Units, in each case together with SalesTax. The Management Fees will be calculated and accrued daily on eachValuation Date and are payable monthly in arrears. The Management Fees are asfollows:

ETF Management Fees

Class E Unit Advisor Class Unit

Horizons HUT 0.95% of the net assetvalue of Horizons HUT’sClass E Units

1.70% of the net assetvalue of Horizons HUT’sAdvisor Class Units

Horizons HUS.U 0.95% of the net asset

value of HorizonsHUS.U’s Class E Units

1.70% of the net asset

value of HorizonsHUS.U’s Advisor ClassUnits

The Investment Manager and the Sub-Advisor are compensated for their services by the Manager or an affiliate without any further cost to the ETFs.

Performance Fee

Each of the ETFs pays the Manager performance fees equal to 20% of the amount by which the ETF outperforms the benchmark applicable to that ETF (each a“Benchmark”).

ETF Benchmark

Horizons HUT S&P/TSX 60 Index™

Horizons HUS.U S&P 500®

Subject to the Return Deficiency described below, performance fees will be payable where the performance of an ETF is positive and exceeds the performanceof its Benchmark and such fee will only be payable in such circumstances if, andto the extent that, the performance of the ETF, as calculated including the performance fee, remains positive. Performance fees will be calculated andaccrued daily and payable to the Manager quarterly in arrears.

If the performance of an ETF for the period being measured is less than itsBenchmark (a “Return Deficiency”), then no performance fees will be payable

until the performance of the ETF thereafter relative to the Benchmark hasexceeded the amount of the Return Deficiency. In addition, no performance fee paid will equal more than 20% of the positive performance of an ETF since thelatter of the ETF’s inception or the last time a performance fee was paid.

Management Fee Distributions

The Manager may, at its discretion, agree to charge a reduced fee as compared tothe fee it would otherwise be entitled to receive from an ETF with respect to largeinvestments in that ETF by Unitholders. Such a reduction will be dependent upona number of factors, including the amount invested, the total assets of the ETF



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Type of Charge Description

under administration and the expected amount of account activity. In such cases,an amount equal to the difference between the fee otherwise chargeable and thereduced fee will be distributed by that ETF, at the discretion of the Manager, tothe applicable Unitholders as Management Fee Distributions.

Advisor Class Units Service Fee

The Manager will pay to registered dealers a Service Fee equal to 0.75% perannum of the net asset value of Advisor Class Units of each held by clients of theregistered dealer. The only difference between Class E Units and Advisor ClassUnits is that the higher Management Fee charged to the Advisor Class reflects theService Fee paid to registered dealers by the Manager. The Manager does not payService Fees to registered dealers in respect of Class E Units.

See “Fees and Expenses” at page 20.

Operating Expenses Unless otherwise waived or reimbursed by the Manager, an ETF pays all of itsoperating expenses, including, but not limited to: audit fees; trustee and custodialexpenses; valuation, accounting and record keeping costs; legal expenses; permitted prospectus preparation and filing expenses; costs associated with

delivering documents to Unitholders; annual stock exchange fees; index licensingfees, if applicable; CDS fees; bank related fees and interest charges; Unitholderreports and servicing costs; income taxes; Registrar and Transfer Agent fees; costsof the IRC; Sales Tax; brokerage expenses and commissions; and withholdingtaxes.

Costs and expenses payable by the Manager, or an affiliate of the Manager,include the fees payable to the Investment Manager, the Sub-Advisor, and theService Fee paid to registered dealers on Advisor Class Units held by clients ofthat dealer, as well as fees of a general administrative nature.


Expenses of the Issue Apart from the initial organizational cost of the ETFs, all expenses related to theissuance of Units shall be borne by the ETFs unless otherwise waived or

reimbursed by the Manager.


Fees and Expenses Payable Directly by Unitholders

Redemption ChargeThe Manager may charge redeeming Unitholders of an ETF, at its discretion, aredemption charge of up to 0.25% of their exchange or redemption proceeds tooffset certain associated transaction costs or to address any activity the Manager believes is not in the best interest of Unitholders. The Manager will publish thecurrent redemption charge, if any, on its website, www.HorizonsETFs.com.

See “Exchange and Redemption of Units” at page 34.

Index Fund Fees The index funds in which the ETFs may invest may be managed by the Manager,

its affiliates or independent fund managers. There are fees and expenses payable by such index funds in addition to the fees and expenses payable by the ETFs.With respect to such investments, no management fees or incentive fees are payable by the ETFs that, to a reasonable person, would duplicate a fee payable bysuch underlying index funds for the same service. Further, no sales fees orredemption fees are payable by the ETFs in relation to its purchases orredemptions of the securities of the underlying index funds in which it invests ifthese underlying index funds are managed by the Manager or an affiliate orassociate of the Manager.



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Annual Returns and Management Expense Ratios

The following chart provides the annual returns and the MER for the ETFs from their dates of inception toDecember 31, 2012. The MER provided below was calculated on an annualized basis as at December 31, 2012.

ETF Date of Inception Class

Annual

Returns (%) MER (%)(1)

Horizons HUT May 30, 2012 Class E Units 6.63% 1.07%

Horizons HUT May 30, 2012 Advisor Class Units 6.10% 1.91%

Horizons HUS.U May 30, 2012 Class E Units 4.64% 1.07%

Horizons HUS.U May 30, 2012 Advisor Class Units 4.12% 1.91%

(1) MER is based on total expenses (excluding commissions and other portfolio transaction costs) for the stated period and is expressed asan annualized percentage of daily average net asset value during the period. Out of its Management Fees, the Manager pays for suchservices to the ETF as Investment Manager compensation, service fees and marketing.



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GLOSSARY

The following terms have the following meaning:

“Advisor Class Units” means the advisor class units of the ETFs;

“AlphaPro” means AlphaPro Management Inc., the manager, trustee and promoter of the ETFs;

“Basket of Securities” means a group of shares, bonds or other securities, including but not limited to one or moreexchange traded funds or securities, as determined by the Investment Manager from time to time for the purpose ofsubscription orders, exchanges, redemptions or for other purposes;

“Benchmark” means the S&P/TSX 60 Index™ when calculating the performance fee payable in respect ofHorizons HUT; and means the S&P 500® when calculating the performance fee payable in respect of HorizonsHUS.U;

“Canadian securities legislation” means the securities laws in force in each province and territory of Canada, allregulations, rules, orders and policies made thereunder and all multilateral and national instruments adopted by theSecurities Regulatory Authorities in such jurisdictions;

“Cdn Black Swan Overlay” has the meaning ascribed to such term under the heading “Investment Objectives” on page 15;

“CDS” means CDS Clearing and Depository Services Inc.;

“CDS Participant” means a participant in CDS that holds security entitlements in Units on behalf of beneficialowners of those Units;

“CIBC Mellon Global” means CIBC Mellon Global Securities Services Company;

“CIBC Mellon Trust” means CIBC Mellon Trust Company;

“CICA” means the Canadian Institute of Chartered Accountants;

“Class E Units” means the Class E units of the ETFs;

“Committee” means the S&P/TSXTM Index Policy Committee;

“Constituent Issuers” means the issuers that from time to time are included in an Index as selected by the IndexProvider and “Constituent Issuer” means any one of such issuers;

“CRA” means the Canada Revenue Agency;

“Custodian” means CIBC Mellon Trust, in its capacity as custodian of each ETF pursuant to the CustodianAgreement;

“Custodian Agreement” means the Custodian Agreement dated June 4, 2012, as amended February 15, 2013, between CIBC Mellon Global, Canadian Imperial Bank of Commerce, the Bank of New York Mellon, theCustodian, and each of the ETFs;

“Dealer” means a registered dealer (that may or may not be a Designated Broker) that has entered into a DealerAgreement with the Manager, on behalf of an ETF, pursuant to which the Dealer may subscribe for Units of the ETFas described under “Purchases of Units” on page 32;



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“Dealer Agreement” means an agreement between the Manager, on behalf an ETF, and a Dealer;

“Designated Broker” means a registered dealer that has entered into a Designated Broker Agreement with theManager on behalf of an ETF, pursuant to which the Designated Broker agrees to perform certain duties in relationto that ETF;

“Designated Broker Agreement” means an agreement between the Manager, on behalf of an ETF, and aDesignated Broker;

“distribution record date” means a date determined by the Manager as a record date for the determination ofUnitholders of an ETF entitled to receive a distribution from the ETF;

“DPSP” means a deferred profit sharing plan within the meaning of the Tax Act;

“equity-related securities” means securities that are either convertible into equity securities (e.g., a subscriptionright or a warrant) or the underlying interest of which is an equity security, and may be exchange traded or tradedover-the-counter;

“ETFs” means Horizons HUT and Horizons HUS.U and “ETF” means any one of them;

“GAAP” means the generally accepted accounting principles as set out in the Handbook of the CICA, as amendedfrom time to time;

“GST/HST” means taxes exigible under Part IX of the Excise Tax Act (Canada) and the regulations madethereunder;

“Horizons” means Horizons ETFs Management (Canada) Inc.;

“Horizons HUS.U” means the Horizons Universa US Black Swan ETF;

“Horizons HUT” means the Horizons Universa Canadian Black Swan ETF;

“Indemnified Persons” means the Investment Manager and its directors, officers and employees;

“Index” means the S&P/TSX 60™ Index in respect of Horizons HUT, and the S&P 500® in respect of HorizonsHUS.U, and “Indices” means both the S&P/TSX 60™ Index and the S&P 500®. Also see “Overview of the Sectorsthat the ETFs Invest In” at page 19 and “Other Material Facts – Index Information” at page 64;

“Index Level” means the level of the Index as calculated by the Index Provider from time to time;

“Index Provider” means S&P, the third party provider of each Index, with which AlphaPro has entered intolicensing arrangements to use each Index and certain trademarks in connection with the operation of the ETFs;

“Index Securities” means the securities of the Constituent Issuers included in an Index;

“Investment Management Agreement” means the investment management agreement dated December 31, 2008,as last amended February 15, 2013, among the ETFs, the Manager and the Investment Manager;

“Investment Manager” means Horizons Investment Management Inc., in its capacity as investment manager of theETFs pursuant to the Investment Management Agreement;

“IRC” means the independent review committee of the ETFs established under NI 81-107;

“Management Fee Distribution”, as described under “Fees and Expenses”, means an amount equal to thedifference between the Management Fee otherwise chargeable by the Manager and a reduced fee determined by the



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Manager, at its discretion, from time to time, and that is distributed quarterly in cash, at the discretion of theManager, to the applicable Unitholders who hold large investments in an ETF;

“Management Fees” means the annual management fees, calculated and accrued daily and payable monthly inarrears by an ETF, to the Manager equal to: (a) an annual percentage of the net asset value of the Class E Units ofthe ETF; and (b) an annual percentage of the net asset value of the Advisor Class Units of the ETF, in each casetogether with Sales Tax;

“Manager” means AlphaPro, in its capacity as manager of the ETFs pursuant to the Trust Declaration;

“Mirae Asset” means Mirae Asset Global Investments Co., Ltd.;

“NASDAQ” means the NASDAQ Stock Exchange;

“NBF” means National Bank Financial Inc.;

“net asset value” means the net asset value of an ETF as calculated on each Valuation Date in accordance with theTrust Declaration;

“NI 81-102” means National Instrument 81-102 Mutual Funds;

“NI 81-107” means National Instrument 81-107 Independent Review Committee for Investment Funds;

“NYSE” means the New York Stock Exchange;

“Plan” means a trust governed by a RRSP, a RRIF, a DPSP, a RDSP, a RESP or a TFSA;

“PNU” means the prescribed number of Units of a class of an ETF as determined by the Manager from time to timefor the purpose of subscription orders, redemptions or for other purposes;

“Promoter” means AlphaPro, in its capacity as promoter of the ETFs;

“Proxy Voting Policy” means the proxy voting policies, procedures and guidelines for any securities held by theETFs to which voting rights are attached;

“RDSP” means a registered disability savings plan within the meaning of the Tax Act;

“Registrar and Transfer Agent” means CIBC Mellon Trust;

“Reinvestment Plan” means the distribution reinvestment plan for the ETFs as described under the heading“Distribution Policy – Distribution Reinvestment Plan” at page 30;

“RESP” means a registered education savings plan within the meaning of the Tax Act;

“RRIF” means a registered retirement income fund within the meaning of the Tax Act;

“RRSP” means a registered retirement savings plan within the meaning of the Tax Act;

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc.;

“Sales Tax” means all applicable provincial and federal sales, use, value-added or goods and services taxes,including GST/HST;

“Securities Regulatory Authorities” means the securities commission or similar regulatory authority in each province and territory of Canada that is responsible for administering the Canadian securities legislation in force in



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such jurisdictions and “Securities Regulatory Authority” means any one such securities commission or similarregulatory authority;

“Service Fee” means the service fee payable to a registered dealer in respect of the Advisor Class Units held byclients of the registered dealer;

“Sub-Advisor” means Universa Investments L.P.;

“Sub-Advisory Agreement” means the sub-advisory agreement dated April 27, 2012 among the Manager, theInvestment Manager and the Sub-Advisor;

“Tax Act” means the Income Tax Act (Canada) as amended from time to time;

“Tax Amendment” means a proposed amendment to the income tax laws of Canada publicly announced by theMinister of Finance (Canada) prior to the date hereof;

“TFSA” means a tax-free savings account within the meaning of the Tax Act;

“Trading Day” in respect of Horizons HUT means a day on which a session of the TSX is held, and in respect ofHorizons HUS.U means a day on which sessions of the TSX, NYSE and NASDAQ are each held;

“Trust Declaration” means the amended and restated declaration of trust for the ETFs made as of December 31,2008 by the Trustee, as last amended February 15, 2013;

“Trustee” means AlphaPro, in its capacity as trustee of each ETF pursuant to the Trust Declaration;

“TSX” means the Toronto Stock Exchange;

“Unitholder” means a holder of Units of an ETF;

“Units” means, together, the Class E Units and Advisor Class Units of the ETFs, and “Unit” means a Class E Unitor Advisor Class Unit of either ETF;

“Universa BSPP Overlay” means the Cdn Black Swan Overlay in respect of Horizons HUT and the US BlackSwan Overlay in respect of Horizons HUS.U;

“US Black Swan Overlay” has the meaning ascribed to such term under the heading “Investment Objectives” on page 15;

“Valuation Date” for an ETF means a day upon which a session of the TSX is held or such other dates determinedappropriate by AlphaPro; and

“Valuation Time” means, for each ETF, 4:00 p.m. (EST) on a Valuation Date or such other time determinedappropriate by AlphaPro, or the Investment Manager, as applicable.



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OVERVIEW OF THE LEGAL STRUCTURE OF THE ETFs

The Horizons ETFs consist in total of 74 open-end mutual fund trusts established under the laws of Ontario, two ofwhich are offered pursuant to this prospectus. The manager and trustee of the ETFs is AlphaPro Management Inc.The Manager has retained its affiliate, Horizons Investment Management Inc., to be responsible for implementingthe investment objectives and strategies of the ETFs. The Investment Manager has in turn retained UniversaInvestments L.P. (the “Sub-Advisor”), a limited partnership organized under the laws of the State of Delaware, toact as the sub-advisor, and to make and execute certain investment decisions, on behalf of the ETFs. See“Organization and Management Details of the ETFs” at page 43.

The ETFs that are offered pursuant to this prospectus are

Name of ETF Abbreviated

Name

TSX Ticker Symbol

Class E Units Advisor Class

Units

Horizons Universa Canadian Black Swan ETF Horizons HUT HUT HUT.A

Horizons Universa US Black Swan ETF Horizons HUS.U HUS.U HUS.A

Units of the ETFs are listed and trade on the TSX under the TSX ticker symbols noted above.

The ETFs were created pursuant to the Trust Declaration. The head office of the Manager and the ETFs is 26Wellington Street East, Suite 700, Toronto, Ontario, M5E 1S2. While each ETF is or will be a mutual fund underthe securities legislation of certain provinces and territories of Canada, each ETF is entitled to rely on exemptiverelief from certain provisions of Canadian securities legislation applicable to conventional mutual funds. The ETFsdo not issue index participation units.

INVESTMENT OBJECTIVES

The fundamental investment objective of each ETF is set out below. The fundamental investment objective of anETF may not be changed except with the approval of Unitholders of that ETF. See “Unitholder Matters” at page 57for additional descriptions of the process for calling a meeting of Unitholders and the requirements of Unitholder

approval.

Horizons HUT

Investment Objective

The investment objective of Horizons HUT is to provide Unitholders with exposure to (a) the performance of theS&P/TSX 60 Index™ through a portfolio of equity securities and/or index funds and (b) an actively managed basketof put and call options (the “Cdn Black Swan Overlay”) that seeks to provide protection from significant marketdeclines over rolling one-month periods and seeks to reduce the overall volatility of returns of Horizons HUT.

Horizons HUS.U

Investment Objective

The investment objective of Horizons HUS.U is to provide Unitholders with exposure to (a) the performance of theS&P 500® through a portfolio of equity securities and/or index funds and (b) an actively managed basket of put andcall options (the “US Black Swan Overlay”) that seeks to provide protection from significant market declines overrolling one-month periods and seeks to reduce the overall volatility of returns of Horizons HUS.U. HorizonsHUS.U will not seek to hedge its exposure to the U.S. dollar back to the Canadian dollar.



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INVESTMENT STRATEGIES

Investment Philosophy of the Sub-Advisor

The Sub-Advisor is an investment management firm that specializes in exploiting certain low-probability marketevents (“Tails” or “Black Swans”) that are mispriced in the financial markets by taking positions where the

mispricing is the greatest. This approach is designed to be more sensitive to extreme market events and less sensitiveto general market activity. The Sub-Advisor’s investment philosophy has been refined over a decade ofimplementation and development of its protection strategies, creating an innovative investment niche and riskmanagement methodology.

The Sub-Advisor’s basic approach arises from a long-term specialization in extreme events such as Tails, where theSub-Advisor offers a unique combination of decades of focused options trading experience and technical expertise.

The Sub-Advisor derives a competitive edge through its ability to invest the Cdn Black Swan Overlay and the USBlack Swan Overlay (the “Universa BSPP Overlays”) in a manner that is substantially different than the portfolio protection offered through more traditional options strategies or other risk management strategies. The Sub-Advisordistinguishes itself through a focused and disciplined investment approach, which seeks to:

achieve increasingly greater returns in the event of correspondingly severe market declines;

employ empirical and fundamental-based option valuation;

take advantage of options market supply and demand imbalances;

provide liquidity against order flow imbalances in options markets, as well as from structural and behavioral biases; and

take advantage of its favourable access to order flows.

Index Quarterly Returns

The left Tail of the quarterly returns of the Indices for the 20-year period ended March 31, 2013, as identified by theovals in the following charts, illustrates the types of events that the Sub-Advisor seeks to target and protect againstin its management of the Universa BSPP Overlays.



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and/or index funds over time. This reinvestment seeks to achieve a compounding effect, which is expectedto contribute to the performance of an ETF should the applicable Index recover.

Conviction to remain substantially invested in the market . Each ETF’s strategy of exposure to an Index,together with the applicable Universa BSPP Overlay which seeks to reduce downside risk, seeks to achievean inherently less risky portfolio. In sudden, significant market declines this strategy seeks to reduce losses

to the ETFs, and to correspondingly provide reduced volatility of downside returns.

Specific Investment Strategies

The specific investment strategies of each ETF are set out below.

Horizons HUT

To achieve its investment objective, Horizons HUT is at all times substantially invested in a portfolio of equitysecurities and/or index funds that will provide exposure to the S&P/TSX 60 Index™. Additionally, the Sub-Advisorhas implemented the Cdn Black Swan Overlay in accordance with its proprietary methods to attempt to provide protection from significant market declines over rolling one-month periods. The bulk of this protection comes in theform of long and short positions on put and call options on indices that track the performance of the S&P/TSX 60Index™ or comparable North American equity indices. The long put options will generally be significantly “out ofthe money”, and should generate returns in the event of a significant decline in the S&P/TSX 60 Index™. The Sub-Advisor generally intends to re-initiate new option positions, or roll existing option positions, that make up the CdnBlack Swan Overlay each month and reinvest any gains from these activities into equity securities and/or indexfunds. The Sub-Advisor also may, at its discretion, liquidate and establish new option positions in the Cdn BlackSwan Overlay during a month, or liquidate option positions without establishing new positions. The Cdn BlackSwan Overlay only contains exchange-traded options.

Horizons HUS.U

To achieve its investment objective, Horizons HUS.U is at all times substantially invested in a portfolio of equitysecurities and/or index funds that will provide exposure to the S&P 500®. Additionally, the Sub-Advisor hasimplemented the US Black Swan Overlay in accordance with its proprietary methods to attempt to provide protection from significant market declines over rolling one-month periods. The bulk of this protection comes in the

form of long and short positions on put and call options on indices that track the performance of the S&P 500®. Thelong put options will generally be significantly “out of the money”, and should generate returns in the event of asignificant decline in the S&P 500®. The Sub-Advisor generally intends to re-initiate new option positions, or rollexisting option positions, that make up the US Black Swan Overlay each month and reinvest any gains from theseactivities into equity securities and/or index funds. The Sub-Advisor also may, at its discretion, liquidate andestablish new option positions in the US Black Swan Overlay during a month, or liquidate option positions withoutestablishing new positions. The US Black Swan Overlay only contains exchange-traded options. Horizons HUS.Udoes not seek to hedge its exposure to the U.S. dollar back to the Canadian dollar.

General Investment Strategies

Each ETF invests in a variety of portfolio securities, index funds and other instruments which may include, but arenot limited to, equity and equity related securities and options.

The index funds in which the ETFs may invest may be managed by the Manager, its affiliates or independent fundmanagers.

The ETFs may employ a “stratified sampling” strategy. Under this stratified sampling strategy, an ETF may not holdall of the securities that are included in its Index, but instead will hold a portfolio of securities that closely matchesthe aggregate investment characteristics of the securities included in the applicable Index.



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An ETF may enter into securities lending transactions to the extent permitted by applicable securities laws, to earnadditional income for the ETF.

As soon as practicable following the end of each month, the Manager intends to publish on its website(www.HorizonsETFs.com) a summary of the investment portfolio disclosing the top ten positions held by each ETFexpressed as an absolute percentage of the net assets of the ETF.

Leverage

Neither ETF will be exposed to leverage in excess of its net asset value. Any leverage obtained in respect of the useof options by the ETFs will be in compliance with NI 81-102.

OVERVIEW OF THE SECTORS THAT THE ETFs INVEST IN

S&P/TSX 60™ Index

Horizons HUT uses the S&P/TSX 60™ Index for the equity portion of its portfolio. The S&P/TSX 60™ Indexrepresents a broad, large cap view of the Canadian marketplace and accounts for approximately 63% of Canada’sequity market capitalization.1

The S&P/TSX 60™ Index is comprised of 60 of the largest (by market capitalization) and most liquid securitieslisted on the TSX, selected by S&P using its industrial classifications and guidelines for evaluating issuercapitalization, liquidity and fundamentals. The S&P/TSX 60™ Index is a market capitalization-weighted index ofsecurities of the Constituent Issuers.

S&P 500®

Horizons HUS.U uses the S&P 500® for the equity portion of its portfolio. The S&P 500® has been widelyregarded as the best single gauge of the large cap U.S. equities market since the index was first published in 1957.The index has over US$5.58 trillion benchmarked, with index assets comprising approximately US$1.31 trillion ofthis total. The index includes 500 leading companies in leading industries of the U.S. economy, capturing 75%coverage of U.S. equities. The market capitalization values of the Constituent Issuers of the S&P 500® range from$1.29 billion to $422.99 billion.2

The Indices

An Index may be adjusted by the Index Provider from time to time because of various events affecting IndexSecurities. These adjustments may require removing a Constituent Issuer from an Index and substituting a newConstituent Issuer while at the same time, if necessary, changing the number of Index Securities, thereby effectivelyincreasing or decreasing the relative weight of the Constituent Issuers in such Index. The applicable ETF willattempt to implement changes such that the exposure of such ETF to the Index will be adjusted to account for thechanges to the Constituent Issuers of the applicable Index, but may not be able to do so at the same time theadjustment to the Index occurs.

INVESTMENT RESTRICTIONS

General

The ETFs are subject to certain restrictions and practices contained in securities legislation, including NI 81-102,which are designed in part to ensure that the investments of the ETFs are diversified and relatively liquid and toensure the proper administration of the ETFs. The investment restrictions and practices applicable to the ETFs

1 Source: S&P. Data as of March 31, 2013. 2 Source: S&P. Data as of February 3, 2012.



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which are contained in securities legislation, including NI 81-102, may not be deviated from without the priorconsent of the Canadian Securities Regulatory Authorities having jurisdiction over the ETFs.

Subject to the following, and the exemptive relief that has been obtained or has been, or will be, applied for, theETFs are managed in accordance with the investment restrictions and practices set out in the applicable securitieslegislation, including NI 81-102.

Tax Related Investment Restrictions

An ETF will not make an investment or conduct any activity that would result in the ETF failing to qualify as a “unittrust” or “mutual fund trust” within the meaning of the Tax Act or that would result in the ETF becoming a “SIFTtrust” within the meaning of the Tax Act. In addition, no ETF will make or hold any investment in “specified property” (within the meaning of the proposed amendment to subsection 132(4) of the Tax Act) if it would result inthat ETF owning specified properties having a fair market value greater than 10% of the fair market value of all ofits property.

FEES AND EXPENSES

Fees and Expenses Payable by the ETFs

Management Fees

Each ETF will pay Management Fees calculated and accrued daily and payable monthly in arrears to the Managerequal to: (i) an annual percentage of the net asset value of the Class E Units, plus Sales Tax; and (ii) an annual percentage of the net asset value of the Advisor Class Units, plus Sales Tax. The Management Fees of each ETF areas follows:

ETF Management Fees

Class E Unit Advisor Class Unit

Horizons HUT 0.95% of the net asset value of HorizonsHUT’s Class E Units

1.70% of the net asset value of HorizonsHUT’s Advisor Class Units

Horizons HUS.U 0.95% of the net asset value of HorizonsHUS.U’s Class E Units

1.70% of the net asset value of Horizons

HUS.U’s Advisor Class Units

Performance Fee

Each of the ETFs will pay the Manager performance fees equal to 20% of the amount by which an ETF outperformsthe Benchmark applicable to that ETF.

ETF Benchmark

Horizons HUT S&P/TSX 60 Index™

Horizons HUS.U S&P 500®

Subject to the Return Deficiency described below, performance fees will be payable where the performance of anETF is positive and exceeds the performance of its Benchmark and such fee will only be payable in suchcircumstances if, and to the extent that, the performance of the ETF, as calculated including the performance fee,remains positive. Performance fees will be calculated and accrued daily and payable to the Manager quarterly inarrears.

If the performance of an ETF for the period being measured is less than its Benchmark (a “Return Deficiency”),then no performance fees will be payable until the performance of the ETF thereafter relative to the Benchmark hasexceeded the amount of the Return Deficiency. In addition, no performance fee paid will equal more than 20% of



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the positive performance of an ETF since the latter of the ETF’s inception or the last time a performance fee was paid.

Advisor Class Units Service Fee

The Manager will pay to registered dealers a Service Fee equal to 0.75% per annum of the net asset value of Advisor

Class Units of each ETF held by clients of the registered dealer. The only difference between Class E Units andAdvisor Class Units of an ETF is that a higher Management Fee is charged to the Advisor Class and such higher feereflects the Service Fee paid to registered dealers by the Manager. The ETFs do not pay any Service Fees toregistered dealers in respect of Class E Units.

Management Fee Distributions

To encourage very large investments in an ETF and to ensure Management Fees are competitive for theseinvestments, the Manager may, at its discretion, agree to charge a reduced fee as compared to the fee it wouldotherwise be entitled to receive from the ETF with respect to investments in the ETF by Unitholders that hold, onaverage during any period specified by the Manager from time to time (currently a quarter), Units of the ETF havinga specified aggregate value. Such a reduction will be dependent upon a number of factors, including the amountinvested, the total assets of the ETF under administration and the expected amount of account activity. An amountequal to the difference between the fee otherwise chargeable and the reduced fee of the applicable ETF will bedistributed no less than quarterly in cash by the ETF, at the discretion of the Manager, to those Unitholders asManagement Fee Distributions.

The availability and amount of Management Fee Distributions with respect to Units of an ETF will be determined by the Manager. Management Fee Distributions for an ETF will generally be calculated and applied based on theUnitholder’s average holdings of Units of the ETF over each applicable period as specified by the Manager fromtime to time. Management Fee Distributions will be available only to beneficial owners of Units of an ETF and notto the holdings of Units of the ETF by dealers, brokers or other CDS Participants that hold Units of the ETF on behalf of beneficial owners. In order to receive a Management Fee Distribution for any applicable period, a beneficial owner of Units of an ETF must submit a claim for a Management Fee Distribution that is verified by aCDS Participant on the beneficial owner’s behalf and provide the Manager with such further information as theManager may require in accordance with the terms and procedures established by the Manager from time to time.

The Manager reserves the right to discontinue or change Management Fee Distributions at any time. The taxconsequences of Management Fee Distributions made by an ETF will generally be borne by the Unitholders of theETF receiving these distributions from the Manager.

Operating Expenses

Unless otherwise waived or reimbursed by the Manager, each ETF pays all of its operating expenses, including, butnot limited to: audit fees; trustee and custodial expenses; valuation, accounting and record keeping costs; legalexpenses; permitted prospectus preparation and filing expenses; costs associated with delivering documents toUnitholders; annual stock exchange fees; index licensing fees, if applicable; CDS fees; bank related fees and interestcharges; Unitholder reports and servicing costs; income taxes; Registrar and Transfer Agent fees; costs of the IRC;Sales Tax; brokerage expenses and commissions; and withholding taxes.

Costs and expenses payable by the Manager, or an affiliate of the Manager, include the fees payable to theInvestment Manager, the Service Fee paid to registered dealers on Advisor Class Units held by clients of that dealer,as well as fees of a general administrative nature.

Expenses of the Issue

Apart from the initial organizational cost of the ETFs, all expenses related to the issuance of Units shall be borne bythe ETFs unless otherwise waived or reimbursed by the Manager.



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Index Fund Fees

The index funds in which the ETFs may invest may be managed by the Manager, its affiliates or independent fundmanagers. There are fees and expenses payable by such index funds in addition to the fees and expenses payable bythe ETFs. With respect to such investments, no management fees or incentive fees are payable by the ETFs that, to areasonable person, would duplicate a fee payable by such underlying index funds for the same service. Further, nosales fees or redemption fees are payable by the ETFs in relation to its purchases or redemptions of the securities ofthe underlying index funds in which it invests if these underlying index funds are managed by the Manager or anaffiliate or associate of the Manager.

Fees and Expenses Payable Directly by the Unitholders

Redemption Charge

The Manager may charge redeeming Unitholders of an ETF, at its discretion, a redemption charge of up to 0.25% oftheir exchange or redemption proceeds to offset certain associated transaction costs or to address any activity theManager believes is not in the best interest of Unitholders. The Manager will publish the current redemption charge,if any, on its website, www.HorizonsETFs.com.

ANNUAL RETURNS AND MANAGEMENT EXPENSE RATIOS

The following chart provides the annual returns and the MER for the ETFs from their dates of inception toDecember 31, 2012. The MER provided below was calculated on an annualized basis as at December 31, 2012.

ETF Date of Inception Class

Annual

Returns (%) MER (%)(1)

Horizons HUT May 30, 2012 Class E Units 6.63% 1.07%

Horizons HUT May 30, 2012 Advisor Class Units 6.10% 1.91%

Horizons HUS.U May 30, 2012 Class E Units 4.64% 1.07%

Horizons HUS.U May 30, 2012 Advisor Class Units 4.12% 1.91%

(1)

MER is based on total expenses (excluding commissions and other portfolio transaction costs) for the stated period and is expressed asan annualized percentage of daily average net asset value during the period. Out of its Management Fees, the Manager pays for suchservices to the ETF as Investment Manager compensation, service fees and marketing.

RISK FACTORS

An investment in Units of an ETF involves certain risks. Prospective investors should therefore consider thefollowing risks, among others, before subscribing for Units of an ETF.

Stock Market Risk

The values of most securities, in particular equity securities, change with stock market conditions, which areaffected by general economic and market activity.

Use of Options Risk

Each ETF is subject to the full risk of its investment position in the equity securities of Constituent Issuers and/orindex funds providing exposure to the applicable Index and the applicable Universa BSPP Overlay, including thesecurities that are subject to the put and call option positions held by the ETF, should the market price of suchsecurities change adversely. In addition, the ETFs are not expected to participate in a gain in the applicable Index, ifthe gain results in the Index level exceeding the exercise price of an option written on such Index. In suchcircumstances, the holder of the option will likely exercise the option. The use of options may have the effect of



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limiting or reducing the total returns of an ETF if the Sub-Advisor’s expectations concerning future events or marketconditions prove to be incorrect.

There can be no assurance that a liquid exchange or over-the-counter market will exist to permit each ETF to enterin to options transactions on desired terms or to close out option positions should it desire to do so. The ability of anETF to close out its positions may also be affected by exchange-imposed daily trading limits. In addition, exchangesmay suspend the trading of options in volatile markets. If the ETF is unable to repurchase a written call option orsell a long put option that is in-the money, it will be unable to realize its profits or limit its losses until such time assuch option becomes exercisable or expires.

Derivative transactions also involve the risk of the possible default by the other party to the transaction (whether aclearing corporation in the case of exchange-traded instruments or other third party in the case of over-the-counterinstruments) as the other party may be unable to meet its obligations.

Index Risks

An investment in an ETF should be made with an understanding that while a substantial portion of the assets of theETF will be invested in the equity securities of Constituent Issuers and/or index funds providing exposure to theapplicable Index, the ETF will not seek to replicate the performance of the Index as the investment objective of theETF includes exposure to an options protection strategy.

The total return generated by the securities held directly or indirectly by an ETF will be reduced by transaction costs(including transaction costs incurred in adjusting the actual balance of the securities held by an ETF) as well as taxesand other expenses borne by the ETF, whereas such transaction costs, taxes and expenses are not included in thecalculation of the returns of the Index.

Adjustments may be made to an Index, or an Index may cease to be calculated without regard to an ETF or itsUnitholders.

Each Index is maintained and calculated by the Index Provider. In the event an Index is changed or discontinued,the Manager may choose to, in respect of the applicable ETF:

(i) terminate the ETF;

(ii) change the ETF’s investment objective to invest a substantial portion of its assets in underlyingsecurities of an alternative index (subject, where applicable, to Unitholder approval in accordancewith the Trust Declaration and Canadian securities legislation); or

(iii) make such other arrangements as the Manager considers appropriate and in the best interests ofUnitholders in the circumstances.

The Index Provider has reserved the right to make adjustments to the Indices, or to cease calculating Index Levels,without regard to the particular interests of the ETFs, AlphaPro, the Unitholders, Designated Brokers and Dealers, but rather solely with a view to the original purpose of the Indices.

The adverse financial condition of a Constituent Issuer represented in the Index will not necessarily result in the

elimination of exposure to its securities by an ETF unless the relevant Index Securities are removed from the Index.

Derivatives Risk

Any use of derivatives will be in accordance with the investment restrictions and practices of NI 81-102. The use ofderivatives does not guarantee that there will not be a loss or that there will be a gain. The following are someexamples of the risks associated with the use of derivatives by an ETF:



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in the case of over-the-counter options, there is no guarantee that a market will exist for these investmentswhen the ETF wants to close out its position;

in the case of exchange traded options, there may be a risk of a lack of liquidity when the ETF wants toclose out its position;

if the other party to the derivative, in the case of over-the-counter transactions, is unable to fulfil itsobligations, the ETF could experience a loss or fail to realize a gain;

if the ETF has an open position in an options contract with a dealer who goes bankrupt, the ETF couldexperience a loss; and

if a derivative is based on a market index and trading is halted on a substantial number of securities in theindex, or if there is a change in the composition of the index, it could have an adverse effect on thederivative.

Universa BSPP Overlay Risk

There is no assurance that the Universa BSPP Overlays will achieve their intended results. The Universa BSPPOverlays attempt to profit from sudden, significant market declines. If those changes occur over a different period oftime, the Universa BSPP Overlays will be less likely to achieve their intended results. Additionally, there are noguarantees that the option positions of the Universa BSPP Overlays will increase in price at all during a significantdecline and may incur significant losses in any market environment (including a significant decline). Therefore, anETF may underperform the applicable Index. The Universa BSPP Overlays are described in this prospectus as a riskmanagement or protection strategy, but even during periods of sudden, significant market declines, there is noassurance that the strategy will in fact protect investors against market losses.

No Assurance of Meeting Investment Objectives

The success of the ETFs will depend on a number of conditions that are beyond the control of the ETFs. There is asubstantial risk that the investment objectives of the ETFs will not be met.

Complexity

The Sub-Advisor’s systems and operations are dynamic and complex. Certain of its operations interface with anddepend on systems operated by third parties, including prime brokers, administrators, market counterparties andtheir sub-custodians and other service providers, and the Sub-Advisor may not be able to quantify the risks or verifythe reliability of such third-party systems. Certain operational risks may be intrinsic to the Sub-Advisor’s operationsand may impact its financial, accounting or data processing or other systems, especially given the volume, diversityand complexity of the Sub-Advisor’s daily transactions. Periods of market dislocation or abrupt regulatory changemay exacerbate operational risk. The failure of one or more systems or operations or the inability of those systemsor operations to meet the ETFs’ evolving demands could have a material adverse affect on the ETFs.

Market Conditions

There may be market conditions, such as those of November 2008, under which the Sub-Advisor will not be willing

to make investments to implement the Universa BSPP Overlays due to an unfavourable pricing environment. Insuch instances, the ETFs would not generate profits from a sudden market decline. There will be other situations inwhich the Sub-Advisor constructs a portfolio that is designed to generate a lower target return with respect to theUniversa BSPP Overlays, typically based on the Sub-Advisor’s analysis of the pricing, implied volatility or othercharacteristics of the ETFs’ portfolio positions or based on its view of general market conditions or market outlook.



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Low Volatility Risk

The ETFs seek to provide protection from significant market declines during periods of extreme volatility. Duringother periods, the ETFs may underperform relative to the applicable Index.

Foreign Currency Risk – Horizons HUS.U

The portfolio of Horizons HUS.U will include a significant proportion of securities valued in U.S. dollars. BecauseHorizons HUS.U is denominated and traded in U.S. dollars, it will not seek to hedge its exposure to the U.S. dollar back to the Canadian dollar. As a result, the returns of Horizons HUS.U will, when compared to the returns of a portfolio that is hedged to the Canadian dollar, reflect changes in the relative value of the Canadian and U.S. dollars. No assurance can be given that Horizons HUS.U will not be adversely impacted by changes in foreign exchangerates or other factors.

Reliance on Key Personnel

Unitholders will be dependent on the abilities of: (i) the Investment Manager and the Sub-Advisor in providingrecommendations and advice in respect of the ETFs; and (ii) the Manager to effectively manage the ETFs in amanner consistent with their investment objectives, investment strategies and investment restrictions.Implementation of an ETF’s investment strategies will be dependent on the Investment Manager and the Sub-Advisor. There is no certainty that the individuals who are principally responsible for providing administration and portfolio management services to an ETF will continue to be employed by the Manager, the Investment Manager orthe Sub-Advisor, as applicable. Moreover, no assurance can be given that the trading systems and strategies utilized by the Investment Manager, the Sub-Advisor or their successors will prove successful under all, or any, marketconditions.

Specific Issuer Risk

The value of all securities will vary positively or negatively with developments within the specific companies orgovernments that issue such securities.

Regulatory Risk

Legal and regulatory changes may occur, including income tax laws relating to the treatment of mutual funds underthe Tax Act, which may adversely affect the ETFs and which could make it more difficult, if not impossible, for theETFs to operate or to achieve their investment objectives. To the extent possible, the Manager will attempt tomonitor such changes to determine the impact such changes may have on the ETFs and what can be done, ifanything, to try to limit such impact.

Although the ETFs will not be promoted outside of Canada, should a foreign investor or investors accumulatesufficient Units of an ETF such that the ETF, the Manager, the Investment Manager or the Sub-Advisor are, in theManager’s opinion, at risk of becoming subject to, or becoming deemed to be subject to, any extra-territorialregulatory oversight, obligation(s), penalties, fees or approvals, the Manager reserves the right to redeem sufficientUnits of an ETF held by such foreign investor or investors as the Manager deems appropriate, in its own discretion,in order to prevent such occurrence.

Sub-Advisor Risk

As the Sub-Advisor is located in the United States, and as all or a substantial portion of its assets are located outsideof Canada, there may be difficulty enforcing any legal rights against the Sub-Advisor. The Investment Manager isresponsible for any breach of the Sub-Advisor’s standard of care.



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Corresponding Net Asset Value Risk

The closing trading price of Units of an ETF may be different from the net asset value of that ETF. As a result,Dealers may be able to acquire or redeem a PNU at a discount or a premium to the closing trading price per Unit ofan ETF. Such price differences may be due, in large part, to supply and demand factors in the secondary tradingmarket for Units of an ETF being similar, but not identical, to the same forces influencing the price of theunderlying securities of that ETF at any point in time. As Unitholders may redeem a PNU, the Manager expects thatlarge discounts or premiums to the net asset value per Unit of an ETF will not be sustained.

Designated Broker/Dealer Risk

As each ETF will only issue Units directly to Designated Brokers and Dealers, in the event that a purchasingDesignated Broker or Dealer is unable to meet its settlement obligations, the resulting costs and losses incurred will be borne by the applicable ETF.

Cease Trading of Securities Risk

If the securities of a Constituent Issuer of an ETF are cease-traded by order of the relevant Securities RegulatoryAuthority or are halted from trading by the relevant stock exchange, the ETF may halt trading in its securities.Accordingly, Units of an ETF bear the risk of cease-trading orders against all of its Constituent Issuers, not just one.If securities of an ETF are cease-traded by order of a Securities Regulatory Authority, if normal trading is suspendedon the relevant exchange, or if for any reason it is likely there will be no closing bid price for securities, the ETFmay suspend the right to redeem Units for cash, subject to any required prior regulatory approval. If the right toredeem Units for cash is suspended, an ETF may return redemption requests to Unitholders who have submittedthem. If securities are cease-traded, they may not be delivered on an exchange of a PNU for a Basket of Securitiesuntil such time as the cease trade order is lifted.

Exchange Risk

In the event that the TSX closes early or unexpectedly on any day that it is normally open for trading, Unitholderswill be unable to purchase or sell Units of an ETF on the TSX until it reopens and there is a possibility that, at thesame time and for the same reason, the redemption of Units of the ETF may be suspended until the TSX reopens.

Early Closing Risk

Unanticipated early closings of a stock exchange on which securities held by an ETF are listed may result in thatETF being unable to sell or buy securities on that day. If the TSX closes early on a day when an ETF needs toexecute a high volume of securities trades late in the trading day, the ETF may incur substantial trading losses.

Trade Errors

The Sub-Advisor places orders for the purchase and sale of securities with brokers on behalf of the ETFs. Thetrading process is complex and can vary for different types of securities. Moreover, the Sub-Advisor may berequired to break up orders, or may buy or sell the same security for more than one client, further complicating thetrading process. The Sub-Advisor might make or cause errors in trading. The ETFs will be subject to the risk thatthe Sub-Advisor’s assets are insufficient to compensate the ETFs to the extent that the Sub-Advisor is liable for such

errors.

Tax Risk

It is anticipated that each ETF will qualify at all times as a “mutual fund trust” within the meaning of the Tax Act.For an ETF to qualify as a “mutual fund trust”, it must comply on a continuous basis with certain requirementsrelating to the qualification of its Units for distribution to the public, the number of Unitholders of the ETF and thedispersal of ownership of its Units. In addition, an ETF will be deemed not to be a mutual fund trust if it is



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established or maintained primarily for the benefit of non-residents of Canada unless, at that time, all or substantiallyall of its property is property other than “taxable Canadian property” as defined in the Tax Act.

If an ETF were to cease to qualify as a mutual fund trust, the income tax considerations as described under “IncomeTax Considerations” would in some respects be materially different.

There can be no assurance that Canadian federal and provincial income tax laws respecting the treatment of mutualfund trusts will not be changed in a manner that adversely affects the Unitholders of an ETF.

The Tax Act contains rules concerning the taxation of publicly traded Canadian trusts and partnerships that owncertain types of property defined as “non-portfolio property”. A trust that is subject to these rules is subject to trustlevel taxation, at rates comparable to those that apply to corporations, on the trust’s income earned from “non- portfolio property” to the extent that such income is distributed to its Unitholders. These rules will not impose anytax on the ETFs as long as the ETFs comply with their investment restrictions in this regard. If these rules apply tothe ETFs, the after-tax return to Unitholders could be reduced, particularly in the case of a Unitholder who is exemptfrom tax under the Tax Act or is a non-resident of Canada.

In determining its income for tax purposes, the ETFs will generally treat gains or losses on the disposition ofsecurities in their portfolios as capital gains and losses. Generally, any gain or loss realized on derivativetransactions or on the short sale of securities by an ETF will be treated and reported for purposes of the Tax Act oncapital account, as such derivatives transactions will generally be executed as a hedge against the securities of theETF that are capital property, and such short sales will be in respect of securities that are “Canadian securities” for purposes of the Tax Act. In accordance with CRA’s published administrative practice, gains or losses realized onsuch derivatives transactions and short sales will be treated and reported for purposes of the Tax Act on capitalaccount provided there is sufficient linkage with portfolio securities held on capital account. Designations withrespect to the ETF’s income and capital gains will be made and reported to Unitholders on the foregoing basis. TheCRA’s practice is not to grant advance income tax rulings on the characterization of items as capital gains or incomeand no advance income tax ruling has been requested or obtained. If dispositions or transactions of the ETF that arereported on capital account are later determined not to be on capital account, the net income of the ETF for tax purposes and the taxable component of distributions to Unitholders could increase.

On October 31, 2003, the Department of Finance announced a Tax Amendment relating to the deductibility of lossesunder the Tax Act. Under this Tax Amendment, a taxpayer will be considered to have a loss from a business or

property for a taxation year only if, in that year, it is reasonable to assume that the taxpayer will realize a cumulative profit from the business or property during the time that the taxpayer has carried on, or can reasonably be expectedto carry on, the business or has held, or can reasonably be expected to hold, the property. Profit, for this purpose,does not include capital gains or capital losses. On February 23, 2005, the Minister of Finance (Canada) announcedthat a more modest legislative initiative to replace the Tax Amendment of October 31, 2003 would be released. Nosuch legislative proposal has been publicly released to date. If such legislative proposal were to apply to denydeductions that would otherwise reduce an ETF’s taxable income, after-tax returns to Unitholders would be reducedas a result.

The ETFs are also generally required to pay GST/HST on any management fees and most of the other fees andexpenses that they have to pay. Prince Edward Island (April 1, 2013) and Quebec (January 1, 2013) have decided toharmonize their provincial sales taxes with the GST and it is possible that additional provinces will decide toharmonize their provincial sales taxes with the GST. Further, effective April 1, 2013, British Columbia has de-

harmonized, such that both the 5% GST and a 7% provincial sales tax will apply generally in the province. Thesechanges may be accompanied by additional changes to the way that the GST/HST and provincial sales taxes applyto fees and expenses incurred by mutual funds such as the ETFs, which, accordingly, may affect the costs borne byeach ETF and their Unitholders.

U.S. federal legislation enacted in 2010 imposes a 30% withholding tax on U.S. source payments made by U.S.entities and, in some cases, other payments made by non-U.S. entities after December 31, 2013 (or such later date asmay be permitted under future guidance). An ETF may be subject to such a withholding tax if the ETF fails to provide certain private and confidential information regarding certain of its investors (generally U.S. investors orinvestors that have U.S. owners) to the U.S. Internal Revenue Service (the “ IRS”). While it is possible that future



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guidance from the U.S. Treasury and the IRS may exempt some or all exchange-traded funds from theserequirements or otherwise deem them to be compliant with the information reporting requirements, the Manager willmake every effort that is commercially reasonable to avoid the imposition of the 30% withholding tax on amounts paid to an ETF. However, if the Manager cannot enter into (or comply with) an agreement with the IRS in respect ofcompliance with the information reporting requirements, or otherwise satisfy any requirements for exemption ordeemed compliance (including as a result of investors failing to provide an ETF with information), the ETF may besubject to the 30% withholding tax, which would reduce the ETF’s value. Even if Horizons is able to comply,investors failing to comply with information requests or otherwise failing to comply with the requirements of thelegislation may be subject to a 30% withholding tax on certain payments from an ETF. Also, an ETF’s operatingexpenses may be increased by compliance costs in relation to these rules.

Securities Lending, Repurchase and Reverse Repurchase Transaction Risk

The ETFs are authorized to enter into securities lending, repurchase and reverse repurchase transactions inaccordance with NI 81-102. In a securities lending transaction, an ETF lends its portfolio securities through anauthorized agent to another party (often called a “counterparty”) in exchange for a fee and a form of acceptablecollateral. In a repurchase transaction, an ETF sells its portfolio securities for cash through an authorized agentwhile at the same time assuming an obligation to repurchase the same securities for cash (usually at a lower price) ata later date. In a reverse repurchase transaction, an ETF buys portfolio securities for cash while at the same timeagreeing to resell the same securities for cash (usually at a higher price) at a later date. The following are some

examples of the risks associated with securities lending, repurchase and reverse repurchase transactions:

when entering into securities lending, repurchase and reverse repurchase transactions, an ETF is subject tothe credit risk that the counterparty may default under the agreement and the ETF would be forced to makea claim in order to recover its investment;

when recovering its investment on default, an ETF could incur a loss if the value of the portfolio securitiesloaned (in a securities lending transaction) or sold (in a repurchase transaction) has increased in valuerelative to the value of the collateral held by the ETF; and

similarly, an ETF could incur a loss if the value of the portfolio securities it has purchased (in a reverserepurchase transaction) decreases below the amount of cash paid by the ETF to the counterparty.

The ETFs may also engage in securities lending. When engaging in securities lending, an ETF will receivecollateral in excess of the value of the securities loaned and, although such collateral is marked-to-market, the ETFmay be exposed to the risk of loss should a borrower default on its obligations to return the borrowed securities andthe collateral is insufficient to reconstitute the portfolio of loaned securities.

Liability of Unitholders

The Trust Declaration provides that no Unitholder of an ETF will be subject to any personal liability whatsoever forany wilful or negligent acts or omissions or otherwise to any party in connection with the assets of the ETF or theaffairs of the ETF. The Trust Declaration also provides that an ETF must indemnify and hold each Unitholder of theETF harmless from and against any and all claims and liabilities to which such Unitholder may become subject byreason of being, or having been, a Unitholder of the ETF and must reimburse such Unitholder for all legal and otherexpenses reasonably incurred in connection with any such claim or liability. Despite the foregoing, there can be no

absolute certainty, outside of Ontario, that a claim will not be made against a Unitholder of an ETF for liabilitieswhich cannot be satisfied out of the assets of the ETF.

Foreign Stock Exchange Risk – Horizons HUS.U

Investments in foreign securities may involve risks not typically associated with investing in Canada. Foreignexchanges may be open on days when Horizons HUS.U does not price its Units and, therefore, the value of thesecurities in the portfolio of Horizons HUS.U may change on days when investors will not be able to purchase orsell Units. Also, some foreign securities markets may be volatile, lack liquidity, or have higher transaction and



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Despite the foregoing, there can be no absolute certainty, outside of Ontario, that a claim will not be made against aUnitholder of an ETF for liabilities that cannot be satisfied out of the assets of such ETF.

Market for Units

There can be no assurance that an active public market for Units of the ETFs will be sustained.

No Ownership Interest

An investment in Units of the ETFs does not constitute an investment by Unitholders in the securities held by theETFs. Unitholders will not own the securities held by the ETFs.

DISTRIBUTION POLICY

The ETFs anticipate making distributions, if any, to their Unitholders on a quarterly basis. Distributions are notfixed or guaranteed but when available will be paid in cash, unless a Unitholder is participating in the ReinvestmentPlan.

To the extent any ETF has not distributed the full amount of its net income (including net realized capital gains) fortax purposes in any given year, the difference between such amount and the amount actually distributed by the ETFwill be paid at year end as a “reinvested distribution” unless the CDS Participant, on behalf of an investor, requestscash, in writing, at least 10 business days prior to the dividend declaration date. Reinvested distributions on Units ofan ETF, net of any required withholding, will be reinvested automatically in additional Units of the applicable ETFat a price equal to the net asset value per Unit of the ETF on such day. The Units of the ETF will be immediatelyconsolidated such that the number of outstanding Units of the ETF held by each Unitholder on such day followingthe distribution will equal the number of Units of the ETF held by the Unitholder prior to the distribution. In thecase of a non-resident Unitholder, if tax has to be withheld in respect of the distribution, the Unitholder’s dealer willinvoice or debit the Unitholder’s account directly.

With respect to both ETFs, Advisor Class Units of each ETF pay higher Management Fees and, as a result, anydistributions payable on the Advisor Class Units are generally expected to be less than the distributions payable onClass E Units.

The Manager reserves the right to make additional distributions for any ETF in any year if determined to beappropriate.

The tax treatment to Unitholders of reinvested distributions is discussed under the heading “Income TaxConsiderations” at page 38.

Distribution Reinvestment Plan

At any time, Unitholders may elect to participate in the Manager’s distribution reinvestment plan (the“Reinvestment Plan”) by contacting the CDS Participant(s) through which the Unitholder holds its Units. Underthe Reinvestment Plan, cash distributions will be used to acquire additional Units of the applicable ETF (the “Plan

Units”) in the market or from treasury and will be credited to the account of the Unitholder (the “Plan Participant”)through CDS.

Eligible Unitholders may elect to participate in, or withdraw from, the Reinvestment Plan by notifying CDS via theapplicable CDS Participant(s) through which such Unitholder holds its Units of the Unitholder’s intention to participate, or no longer participate, in the Reinvestment Plan. The CDS Participant must, on behalf of suchUnitholder, provide a notice to CDS that the Unitholder wishes, or does not wish, to participate in the ReinvestmentPlan by no later than 4:00 p.m. (Toronto time) at least two business days immediately prior to the applicabledistribution record date in respect of the next expected distribution in which the Unitholder would be entitled toreceive a distribution (reinvested or in cash, as the case may be). CDS shall, in turn, notify the Plan Agent no later



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than 5:00 p.m. (Toronto time) on the applicable distribution record date that such Unitholder does, or does not, wishto participate in the Reinvestment Plan.

Pre-Authorized Cash Contribution

Plan Participants may also make pre-authorized cash contributions under the Reinvestment Plan on a monthly or

calendar quarterly basis, by notifying their CDS Participant(s) sufficiently in advance of the last business day of amonth, calendar quarter or calendar year (a “Payment Date”) to allow such CDS Participant to notify the PlanAgent by 5:00 p.m. (Toronto time) at least 10 business days prior to the applicable Payment Date. A Plan Participantmay invest a minimum of $100 and a maximum of $10,000 per pre-authorized cash contribution no more frequentlythan monthly. Pre-authorized contributions of HUS.U may only be made in U.S. dollars. It is recommended that thefrequency of the payment be consistent with the frequency of the distributions by the applicable ETF.

Distributions due to Plan Participants, along with any pre-authorized cash contributions, will be applied, on behalf ofPlan Participants, to purchase Plan Units in the market or from treasury. Plan Units will be allocated pro rata basedon the number of Units held by Plan Participants. Plan Units will be credited for the benefit of Plan Participants tothe account of the CDS Participant(s) through whom that Plan Participant holds Units. Plan Units being purchased by pre-authorized cash contributions may only be purchased simultaneously with a distribution by the applicableETF, which is being reinvested on behalf of a Plan Participant.

Systematic Withdrawal Plan

Under the Reinvestment Plan, Unitholders will also be able to elect to systematically withdraw Units by selling aspecific dollar amount of Units (in minimum amounts of $100 and maximum amounts of $10,000) owned by suchUnitholder in respect of each subsequent Payment Date. A Unitholder may elect to sell Units by notifying the PlanAgent via the applicable CDS Participant(s) through which such Unitholder holds its Units of the Unitholder’sintention to sell Units.

The CDS Participant must, on behalf of such Unitholder: (i) provide a systematic withdrawal notice directly to thePlan Agent that the Unitholder wishes to sell Units in this manner until the applicable ETF is otherwise notified, nolater than 5:00 p.m. (Toronto time) on the applicable Payment Date, that the Unitholder no longer wishes to sellUnits or there remain no further Units to be sold on behalf of such Unitholder, whichever comes first; and (ii)specify the specified dollar amount of Units to be sold in respect of each subsequent Payment Date.

A Unitholder who makes pre-authorized cash contributions may not deliver a systematic withdrawal notice underthe Reinvestment Plan.

Fractional Units

No fractional Plan Units will be issued under the Reinvestment Plan. Payment in cash for any remaining uninvestedfunds will be made in lieu of fractional Plan Units by the Plan Agent to CDS or CDS Participant, on a monthly orquarterly basis, as the case may be. Where applicable, CDS will, in turn, credit the Plan Participant via theapplicable CDS Participant(s).

Amendments, Suspension or Termination of the Reinvestment Plan

As indicated above, Plan Participants will be able to terminate their participation in the Reinvestment Plan as of a particular distribution record date by notifying their CDS Participant(s) sufficiently in advance of that distributionrecord date to allow such CDS Participant to notify CDS and for CDS to notify the Plan Agent by 4:00 p.m.(Toronto time) at least two business days immediately prior to that distribution record date. Beginning on the firstdistribution payment date after such notice is delivered, distributions to such Unitholders will be in cash. The formof termination notice will be available from CDS Participants and any expenses associated with the preparation anddelivery of such termination notice will be for the account of the Plan Participant exercising its rights to terminate participation in the Reinvestment Plan.



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The Manager will be able to terminate the Reinvestment Plan, in its sole discretion, upon not less than 30 days’notice to the Plan Participants and the Plan Agent, subject to any required regulatory approval. The Manager willalso be able to amend, modify or suspend the Reinvestment Plan at any time, in its sole discretion, provided that itcomplies with certain requirements and gives notice of that amendment, modification or suspension to the PlanParticipants and the Plan Agent, subject to any required regulatory approval, which notice may be given by issuing a press release containing a summary description of the amendment or in any other manner the Manager determines to be appropriate.

The Manager may from time to time adopt rules and regulations to facilitate the administration of the ReinvestmentPlan. The Manager reserves the right to regulate and interpret the Reinvestment Plan as it deems necessary ordesirable to ensure the efficient and equitable operation of the Reinvestment Plan.

Other Provisions

Participation in the Reinvestment Plan is restricted to Unitholders who are residents of Canada for the purposes ofthe Tax Act. Partnerships (other than “Canadian partnerships” as defined in the Tax Act) are not eligible to participate in the Reinvestment Plan. Upon becoming a non-resident of Canada or a partnership (other than aCanadian partnership), a Plan Participant shall notify its CDS Participant(s) and terminate participation in theReinvestment Plan immediately.

The automatic reinvestment of the distributions under the Reinvestment Plan will not relieve Plan Participants ofany income tax applicable to such distributions. Annually, each Plan Participant will be mailed the informationnecessary to enable such Unitholder to complete an income tax return with respect to amounts paid or payable by theapplicable ETF to the Unitholder in the preceding taxation year.

PURCHASES OF UNITS

Issuance of Units of an ETF

To Designated Brokers and Dealers

All orders to purchase Units directly from an ETF must be placed by Designated Brokers and/or Dealers. Purchasesof Horizons HUS.U may only be made in U.S. dollars. The ETFs reserve the absolute right to reject any subscription

order placed by a Designated Broker and/or a Dealer. No fees will be payable by an ETF to a Designated Broker ora Dealer in connection with the issuance of Units of the ETF. On the issuance of Units, the Manager may, at itsdiscretion, charge an administrative fee to a Designated Broker or a Dealer to offset any expenses incurred in issuingthe Units.

On any Trading Day, a Designated Broker or a Dealer may place a subscription order for the PNU or a wholemultiple PNU of an ETF.

If a subscription order is received by an ETF in the applicable currency by 9:30 a.m. on a Trading Day and accepted by the Manager, the ETF will issue to the Designated Broker or Dealer the PNU (or whole multiple thereof) of suchETF subscribed for within three Trading Days after the date on which the subscription order is accepted. Thenumber of Units issued will be based on the net asset value per Unit of each ETF, in the applicable currency, on theTrading Day on which the subscription is accepted by the Manager. An ETF must receive payment for the Units

subscribed for within three Trading Days from the Trading Day of the subscription.

Unless the Manager shall otherwise agree or the Trust Declaration shall otherwise provide, as payment for a PNU ofan ETF, the Designated Broker or Dealer must deliver subscription proceeds consisting of a Basket of Securitiesand/or cash in an amount sufficient so that the value of the Basket of Securities and/or cash delivered is equal to thenet asset value of the applicable PNU of the ETF next determined following the receipt of the subscription order. Inrespect of Horizons HUS.U, the cash portion of such subscription proceeds must be in U.S. dollars. The Managermay, at its sole discretion, accept securities of any other exchange traded fund (an “Acceptable ETF”) held to beacceptable by the Manager from time to time, so that the value of securities and/or cash delivered is equal to the net



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asset value of the PNU of the ETF next determined following the receipt of the subscription order. The value of thesecurities of an Acceptable ETF accepted by the Manager as subscription proceeds for a PNU of an ETF will bedetermined as at the close of business on the date the applicable subscription order is accepted.

The Manager may instead, in its complete discretion, accept subscription proceeds consisting of cash only in anamount equal to the net asset value of the applicable PNU of the ETF next determined following the receipt of thesubscription order. In respect of Horizons HUS.U, such subscription proceeds must be in U.S. dollars.

The Manager will usually publish the applicable PNU for an ETF following the close of business on each TradingDay on its website, www.HorizonsETFs.com. The Manager may, at its discretion, increase or decrease theapplicable PNU from time to time.

In any case in which a subscription order from a Dealer or Designated Broker is received by an ETF on or after theex-dividend date after the date of declaration of a distribution by the ETF where such subscription is payable on or before the record date for that distribution (or such other date where the purchaser becomes entitled to rightsconnected to the Units subscribed) an additional amount equal to the amount per Unit of that distribution must bedelivered in cash to the ETF in respect of each issued Unit.

To Unitholders of an ETF as Reinvested Distributions

Units of an ETF may be issued to Unitholders of an ETF on the automatic reinvestment of distributions inaccordance with the distribution policy of the ETFs. See “Distribution Policy” at page 30.

Buying and Selling Units of an ETF

Investors may trade Units of an ETF in the same way as other securities traded on the TSX, including by usingmarket orders and limit orders. An investor may buy or sell Units of an ETF on the TSX only through a registered broker or dealer in the province or territory where the investor resides. Investors may incur customary brokeragecommissions when buying or selling Units of an ETF.

Units of the ETFs are listed on the TSX under the following ticker symbols:

Name of ETF Abbreviated

Name

TSX Ticker Symbol

Class E Units Advisor Class

Units

Horizons Universa Canadian Black Swan ETF Horizons HUT HUT HUT.A

Horizons Universa US Black Swan ETF Horizons HUS.U HUS.U HUS.A

Special Considerations for Unitholders

The ETFs, as mutual funds subject to NI 81-102, are exempt from the so-called “early-warning” requirements setout in Canadian securities legislation. In addition, the ETFs are able to rely on the exemptive relief obtained by theManager which will allow a Unitholder of an ETF to acquire more than 20% of the Units of the ETF, through

purchases on the TSX without regard to the takeover bid requirements of applicable Canadian securities legislation, provided that any such Unitholder, and any person acting jointly or in concert with the Unitholder, undertakes to theManager not to vote more than 20% of the Units at any meeting of Unitholders of that ETF.

Market participants are permitted to sell Units short and at any price without regard to the restrictions of theUniversal Market Integrity Rules adopted by Securities Regulatory Authorities that generally prohibit sellingsecurities short unless the price is at or above the last sale price.

Although the ETFs will not be promoted outside of Canada, should a foreign investor or investors accumulatesufficient Units of an ETF such that the ETF, the Manager, the Investment Manager or the Sub-Advisor are, in the



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Manager’s opinion, at risk of becoming subject to, or becoming deemed to be subject to, any extra-territorialregulatory oversight, obligation(s), penalties, fees or approvals, the Manager reserves the right to redeem sufficientUnits of an ETF held by such foreign investor or investors as the Manager deems appropriate, in its own discretion,in order to prevent such occurrence.

EXCHANGE AND REDEMPTION OF UNITS

Exchange of Units at Net Asset Value per Unit for Baskets of Securities and/or Cash

Unitholders of an ETF may, at the discretion of the Manager, exchange the applicable PNU (or a whole multiplethereof) of the ETF on any Trading Day for Baskets of Securities and/or cash, subject to the requirement that aminimum PNU be exchanged. To effect an exchange of Units of an ETF, a Unitholder must submit an exchangerequest in the form prescribed by the ETF from time to time to the Manager at its office by 9:30 a.m. on a TradingDay. The exchange price will be equal to the net asset value of each PNU tendered for exchange on the effectiveday of the exchange request, payable by delivery of a Basket of Securities (constituted as most recently published prior to the receipt of the exchange request) and/or cash. In respect of Horizons HUS.U, the cash portion of anyredemption proceeds will be paid in U.S. dollars only. The Units will be redeemed in the exchange. The Managerwill also make available to Designated Brokers and Dealers the applicable PNU to redeem Units of an ETF on eachTrading Day.

If an exchange request is not received by 9:30 a.m. on a Trading Day, the exchange order will be effective only onthe next Trading Day. Settlement of exchanges for Baskets of Securities and/or cash will generally be made by thethird Trading Day after the effective day of the exchange request.

If securities of any listed fund, leveraged exchange traded fund or other issuers in which an ETF has invested arecease-traded at any time by order of a Securities Regulatory Authority, the delivery of Baskets of Securities to aUnitholder, Dealer or Designated Broker on an exchange in the PNU may be postponed until such time as thetransfer of the Baskets of Securities is permitted by law.

Registration of interests in, and transfers of, Units will be made only through the book-entry only system of CDS.The redemption rights described below must be exercised through the CDS Participant(s) through which the ownerholds Units. Beneficial owners of Units should ensure that they provide redemption instructions to the CDSParticipant(s) through which they hold such Units sufficiently in advance of the cut-off times described below to

allow such CDS Participant(s) to notify CDS and for CDS to notify the Manager prior to the relevant cut-off time.

Redemption of Units of an ETF for Cash

On any Trading Day, Unitholders of an ETF may redeem:

(i) on any Trading Day Units of the ETF for cash at a redemption price per Unit equal to 95% of the closing price for Units of the ETF on the TSX on the effective day of the redemption, where the Units beingredeemed are not equal to a PNU or a multiple PNU; or

(ii) on any Trading Day, less any applicable redemption charge as determined by the Manager in its solediscretion from time to time, a PNU or a multiple PNU of the ETF for cash equal to the net asset value ofthat number of Units; or

(iii) Units of the ETF for cash at a redemption price equal to the net asset value of that number of Units if theredemption is made pursuant to a systematic withdrawal plan by a Reinvestment Plan participant.

As Unitholders of an ETF will generally be able to sell their Units of the ETF at the market price on the TSXthrough a registered broker or dealer subject only to customary brokerage commissions, Unitholders of the ETF areadvised to consult their brokers, dealers or investment advisors before redeeming such Units for cash unless they areredeeming a PNU of the ETF or pursuant to a systematic withdrawal plan. Redemptions of Horizons HUS.U forcash will only be paid in U.S. dollars



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suspension. All such Unitholders shall have and shall be advised that they have the right to withdraw their requestsfor exchange or redemption. The suspension shall terminate in any event on the first day on which the conditiongiving rise to the suspension has ceased to exist, provided that no other condition under which a suspension isauthorized then exists. To the extent not inconsistent with official rules and regulations promulgated by anygovernment body having jurisdiction over the ETFs, any declaration of suspension made by the Manager shall beconclusive.

Redemption of Units by Manager

Although the ETFs will not be promoted outside of Canada, should a foreign investor or investors accumulatesufficient Units of an ETF such that the ETF, the Manager, the Investment Manager or the Sub-Advisor are, in theManager’s opinion, at risk of becoming subject to, or becoming deemed to be subject to, any extra-territorialregulatory oversight, obligation(s), penalties, fees or approvals, the Manager reserves the right to redeem sufficientUnits of an ETF held by such foreign investor or investors as the Manager deems appropriate, in its own discretion,in order to prevent such occurrence.

Costs Associated with Redemptions

The Manager may charge to Unitholders of an ETF, at its discretion, a redemption charge of up to 0.25% of theirexchange or redemption proceeds to offset certain associated transaction costs or to address any activity theManager believes is not in the best interest of Unitholders. The Manager will publish the current redemption charge,if any, on its website, www.HorizonsETFs.com.

Allocations of Income and Capital Gains to Redeeming Unitholders

Pursuant to the Trust Declaration, an ETF may allocate and designate any income or capital gains realized by theETF as a result of any disposition of property of the ETF, undertaken to permit or facilitate the exchange and/orredemption of Units to a Unitholder, whose Units are being redeemed or exchanged. In addition, each ETF has theauthority to distribute, allocate and designate any income or capital gains of the ETF to a Unitholder who hasredeemed Units during a year in an amount equal to the Unitholder’s share, at the time of redemption, of the ETF’sincome and capital gains for the year or such other amount that is determined by the ETF to be reasonable. Any suchallocations will reduce the redeeming Unitholder’s proceeds of disposition for tax purposes.

Book-Entry Only System

Registration of interests in, and transfers of, Units of an ETF will be made only through the book-entry only systemof CDS. Units of an ETF must be purchased, transferred and surrendered for redemption only through a CDSParticipant. All rights of an owner of Units of an ETF must be exercised through, and all payments or other propertyto which such owner is entitled will be made or delivered by CDS or the CDS Participant(s) through which theowner holds such Units of the ETF. Upon buying Units of an ETF, the owner will receive only the customaryconfirmation. References in this prospectus to a holder of Units of an ETF means, unless the context otherwiserequires, the owner of the beneficial interest of such Units.

Neither an ETF nor the Manager, nor the Investment Manager, will have any liability for: (i) records maintained byCDS relating to the beneficial interests in Units of the ETF or the book entry accounts maintained by CDS; (ii)maintaining, supervising or reviewing any records relating to such beneficial ownership interests; or (iii) any advice

or representation made or given by CDS and made or given with respect to the rules and regulations of CDS or anyaction taken by CDS or at the direction of the CDS Participants.

The ability of a beneficial owner of Units of an ETF to pledge such Units or otherwise take action with respect tosuch owner’s interest in such Units (other than through a CDS Participant) may be limited due to the lack of a physical certificate.



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An ETF has the option to terminate registration of Units of the ETF through the book-entry only system in whichcase certificates for Units of the ETF in fully registered form will be issued to beneficial owners of such Units or totheir nominees.

Short-Term Trading

The Manager does not believe that it is necessary to impose any short-term trading restrictions on the ETFs at thistime as: (i) the ETFs are exchange traded funds that are primarily traded in the secondary market; and (ii) the fewtransactions involving Units of the ETFs that do not occur on the secondary market will involve Designated Brokersand Dealers, who can only purchase or redeem Units in a PNU and on whom the Manager may impose a redemptioncharge.

PRIOR SALES

Trading Price and Volume

The following table provides the price ranges and volume of Class E Units of Horizons HUT traded on the TSXduring the 12 months that preceded the date of this prospectus.

Month Unit Price Range ($) Volume of Units Traded

May 2012 9.93-9.93 200 June 2012 9.77-10.20 274,027 July 2012 9.84-10.28 9,201

August 2012 10.18-10.46 2,322 September 2012 10.27-10.64 45,593

October 2012 10.35-10.56 50,150 November 2012 10.11-10.60 32,713 December 2012 10.30-10.59 171,048

January 2013 10.47-10.79 38,583 February 2013 10.62-10.77 230,137

March 2013 10.50-10.90 19,903 April 2013 10.02-10.63 140,636

The following table provides the price ranges and volume of Advisor Class Units of Horizons HUT traded on theTSX during the 12 months that preceded the date of this prospectus.

Month Unit Price Range ($) Volume of Units TradedMay 2012 N/A 0 June 2012 9.76-10.16 1,700 July 2012 10.22-10.22 102

August 2012 10.22-10.22 50 September 2012 10.50-10.63 1,368

October 2012 10.37-10.83 6,250 November 2012 10.12-10.50 5,684 December 2012 N/A 0

January 2013 10.55-10.64 1,642 February 2013 N/A 0

March 2013 10.49-10.77 700 April 2013 10.11-10.49 900

The following table provides the price ranges and volume of Class E Units of Horizons HUS.U traded on the TSXduring the 12 months that preceded the date of this prospectus.

Month Unit Price Range ($) Volume of Units TradedMay 2012 9.90-9.90 100 June 2012 9.90-10.12 51,696



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July 2012 9.95-10.27 752 August 2012 10.38-10.51 12,374

September 2012 10.32-10.73 42,733 October 2012 10.30-10.66 183,851

November 2012 9.99-10.40 25,369 December 2012 10.20-10.54 1,173,421


March 2013 10.86-11.12 1,263,114 April 2013 10.97-11.26 63,653

The following table provides the price ranges and volume of Advisor Class Units of Horizons HUS.U traded on theTSX during the 12 months that preceded the date of this prospectus.

Month Unit Price Range ($) Volume of Units TradedMay 2012 N/A 0 June 2012 9.96-10.10 300 July 2012 9.95-10.15 1,100

August 2012 10.40-10.59 18,185 September 2012 10.48-10.93 3,100

October 2012 10.37-10.66 23,150 November 2012 10.00-10.45 13,970 December 2012 10.31-10.41 1,900


March 2013 10.82-11.10 76,700 April 2013 11.25-11.25 250

INCOME TAX CONSIDERATIONS

In the opinion of Fasken Martineau DuMoulin LLP, counsel to the ETFs, the following is, as of the date hereof, asummary of the principal Canadian federal income tax considerations under the Tax Act generally applicable to theacquisition, holding and disposition of Units of an ETF by a Unitholder of the ETF who acquires Units of the ETF

pursuant to this prospectus. This summary only applies to a prospective Unitholder of an ETF who is an individual(other than a trust) resident in Canada for purposes of the Tax Act, who deals at arm’s length with the ETF withinthe meaning of the Tax Act and who holds Units of the ETF as capital property (a “Holder”).

Generally, Units of an ETF will be considered to be capital property of a Holder provided that the Holder does nothold such Units in the course of carrying on a business of buying and selling securities and has not acquired them inone or more transactions considered to be an adventure or concern in the nature of trade. Assuming that an ETF is a“mutual fund trust” for purposes of the Tax Act, certain Holders who might not otherwise be considered to holdUnits of the ETF as capital property may, in certain circumstances, be entitled to have such Units and all other“Canadian securities” owned or subsequently acquired by them treated as capital property by making the irrevocableelection permitted by subsection 39(4) of the Tax Act.

This summary is based on the assumption that each ETF will qualify at all times as a “unit trust” and a “mutual fund

trust” within the meaning of the Tax Act and will not be a “SIFT Trust” within the meaning of the Tax Act. For anETF to qualify as a “mutual fund trust,” it must comply on a continuous basis with certain requirements relating tothe qualification of its Units for distribution to the public, the number of Unitholders of the ETF and the dispersal ofownership of its Units. There can be no assurance that an ETF will maintain its status as a “mutual fund trust”. In

the event an ETF were not to qualify as a mutual fund trust under the Tax Act at all times, the income tax

consequences described below would, in some respects, be materially different.

This summary is also based on the assumptions that none of the issuers of the securities in the portfolio will beforeign affiliates of the ETF or of any Unitholder and, that none of the securities in the portfolio will be a “taxshelter investment” within the meaning of section 143.2 of the Tax Act.



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This summary is based on the current provisions of the Tax Act, the regulations thereunder and counsel’sunderstanding of the current publicly available administrative and assessing practices and policies of the CRA published in writing. This summary takes into account the Tax Amendments. This description is not exhaustive ofall Canadian federal income tax consequences and does not take into account or anticipate changes in the lawwhether by legislative, governmental or judicial action other than the Tax Amendments in their present form, nordoes it take into account provincial, territorial or foreign tax considerations which may differ significantly fromthose discussed herein. There can be no assurance that the Tax Amendments will be enacted in the form publiclyannounced, or at all.

This summary is not exhaustive of all possible Canadian federal income tax considerations applicable to an

investment in Units of an ETF. This summary does not address the deductibility of interest on any funds

borrowed by a Unitholder to purchase Units of an ETF. The income and other tax consequences of investing

in Units will vary depending on an investor’s particular circumstances including the province or territory in

which the investor resides or carries on business. Accordingly, this summary is of a general nature only and

is not intended to be, nor should it be construed as, legal or tax advice to any holder of Units of an ETF.

Prospective investors should consult their own tax advisors with respect to the income tax consequences to

them of an acquisition of Units of an ETF based on their particular circumstances and review the tax related

risk factors.

Status of the ETFs

As noted above, this summary assumes that each ETF will qualify at all times as a “mutual fund trust” for purposesof the Tax Act, and is not a “SIFT trust” for purposes of the Tax Act.

Provided the Units of an ETF are listed on a “designated stock exchange” (within the meaning of the Tax Act) or theETF qualifies as a “mutual fund trust” within the meaning of the Tax Act, Units of that ETF will be qualifiedinvestments under the Tax Act for a trust governed by a Plan.

In the case of an exchange of Units for a Basket of Securities, the investor may receive securities that may or maynot be qualified investments under the Tax Act for Plans or registered pension plans. Investors should consult theirown tax counsel for advice on whether or not such securities would be qualified investments for Plans or registered pension plans.

Units of an ETF are generally not prohibited investments for a “registered pension plan” under subsection 8514(1)of the regulations under the Tax Act unless that ETF is: (a) an employer who participates in the plan; (b) a personconnected with such an employer; (c) a person that controls, directly or indirectly, in any manner whatsoever, suchan employer or connected person; or (d) a person that does not deal at arm’s length with a member of the plan orwith any person described in (a), (b) or (c) above.

Taxation of the ETFs

An ETF must pay tax on its net income (including net realized capital gains) for a taxation year, less the portionthereof that it deducts in respect of the amount paid or payable to its Unitholders in the year. An amount will beconsidered to be payable to a Unitholder of an ETF in a taxation year if it is paid to the Unitholder in that year by theETF or if the Unitholder is entitled in that year to enforce payment of the amount. The Trust Declaration for theETFs requires that sufficient amounts be paid or made payable each year so that no ETF is liable for any income tax

under Part I of the Tax Act.

An ETF is required to include in its income for each taxation year all interest that accrues to it before the end of theyear, or becomes receivable or is received by it before the end of the year, except to the extent that such interest wasincluded in computing its income for a preceding taxation year.

An ETF is required to include in its income for each taxation year any dividends received (or deemed to be received) by it in such year on a security held in its portfolio. Distributions and allocations of certain income and capital gains



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from “SIFT trusts” and “SIFT partnerships” (as defined in the Tax Act) received by an ETF are treated as dividends paid from taxable Canadian corporations.

In general, an ETF will realize a capital gain (or capital loss) upon the actual or deemed disposition of a securityincluded in its portfolio, to the extent the proceeds of disposition net of any reasonable costs of disposition exceed(or are less than) the adjusted cost base of such security, unless the ETF were considered to be trading or dealing insecurities or otherwise carrying on a business of buying and selling securities or, the ETF has acquired the securityin a transaction or transactions considered to be an adventure or concern in the nature of trade. The Manager hasadvised counsel that each ETF takes the position that gains and losses realized on the disposition of its securities arecapital gains and capital losses. The Manager has also advised counsel that each ETF has made an election undersubsection 39(4) of the Tax Act so that all securities held by the ETF that are “Canadian securities” (as defined inthe Tax Act) will be deemed to be capital property of the ETF. An ETF is entitled for each taxation year, throughoutwhich it is a mutual fund trust for purposes of the Tax Act, to reduce (or receive a refund in respect of) its liability, ifany, for tax on its net realized capital gains by an amount determined under the Tax Act based on the redemptions ofUnits during the year (the “Capital Gains Refund”). The Capital Gains Refund in a particular taxation year maynot completely offset the tax liability of the ETF for such taxation year, which may arise upon the sale or otherdisposition of securities included in the portfolio in connection with the redemption of Units.

In general, gains and losses realized by an ETF from derivative transactions are on income account except wheresuch derivatives are used to hedge portfolio securities held on capital account, and are recognized for tax purposes at

the time they are realized by the ETF in accordance with the CRA’s published administrative practice. The Managerhas advised counsel that gains or losses realized on either: (i) derivative transactions, or (ii) the short sale ofsecurities, will be treated and reported for purposes of the Tax Act on capital account, if such derivative transactionsare executed as a hedge against the securities of the ETF that are capital property, or if such short sales are in respectof securities that are “Canadian securities” for purposes of the Tax Act.

To the extent an ETF holds trust units issued by a trust resident in Canada that is not at any time in the relevanttaxation year a “SIFT trust” and held as capital property for purposes of the Tax Act, the ETF will be required toinclude in the calculation of its income the net income, including net taxable capital gains, paid or payable to theETF by such trust in the year, notwithstanding that certain of such amounts may be reinvested in additional units ofthe trust.

A loss realized by an ETF on a disposition of capital property will be a suspended loss for purposes of the Tax Act if

the ETF, or a person affiliated with the ETF, acquires a property (a “ substituted property”) that is the same oridentical to the property disposed of, within 30 days before and 30 days after the disposition and the ETF, or a person affiliated with the ETF owns the substituted property 30 days after the original disposition. If a loss issuspended, the ETF cannot deduct the loss from the ETF’s capital gains until the substituted property is sold and isnot reacquired within 30 days before and after the sale.

An ETF may derive income or gains from investments in countries other than Canada, and as a result, may be liableto pay income or profits tax to such countries. To the extent that any such foreign tax paid by the ETF exceeds 15%of the amount included in the ETF’s income from such investments, such excess may generally be deducted by theETF in computing its net income for the purposes of the Tax Act. To the extent that any such foreign tax paid doesnot exceed 15% of such amount and has not been deducted in computing the ETF’s income, the ETF may designate,in respect of a Unitholder, a portion of its foreign source income which can reasonably be considered to be part ofthe ETF’s income distributed to such Unitholder so that such income, and a portion of the foreign tax paid by the

ETF, may be regarded as foreign source income of, and foreign tax paid by, the Unitholder for the purposes of theforeign tax credit provisions of the Tax Act.

In computing its income under the Tax Act, an ETF may deduct reasonable administrative and other expensesincurred to earn income from property or a business. An ETF may not deduct interest on borrowed funds that areused to fund redemptions of its Units.

An ETF is required to compute all amounts in Canadian dollars for purposes of the Tax Act and accordingly mayrealize gains or losses by virtue of the fluctuation in the value of the foreign currencies relative to Canadian dollars.



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Losses incurred by an ETF in a taxation year cannot be allocated to Unitholders, but may be deducted by the ETF infuture years in accordance with the Tax Act. See “Risk Factors” regarding a Tax Amendment relating to thedeductibility of losses under the Tax Act announced on October 31, 2003.

If an ETF does not qualify as a “mutual fund trust” under the Tax Act throughout a taxation year, among otherthings, the ETF may be liable to pay an alternative minimum tax under the Tax Act. If an ETF is not a “mutual fundtrust” it may be subject to the “mark-to-market” rules in the Tax Act if more than 50% of its units are held by a“financial institution”.

Taxation of Unitholders

A Holder will generally be required to include in computing income for a particular taxation year of the Holder such portion of the net income of the ETF for that particular taxation year, including the taxable portion of any netrealized capital gains, as is paid or becomes payable to the Holder, including any Management Fee Distributions,(whether in cash or whether such amount is automatically reinvested in additional Units of the ETF). The non-taxable portion of an ETF’s net realized capital gains that are paid or become payable to a Holder in a taxation yearwill not be included in computing the Holder’s income for the year. Any other amount in excess of a Holder’s shareof the net income of an ETF for a taxation year that is paid or becomes payable to the Holder in the year (i.e. returnsof capital) will not generally be included in the Holder’s income for the year, but will reduce the adjusted cost baseof the Holder’s Units of the ETF. To the extent that the adjusted cost base of a Unit of an ETF would become anegative amount, the negative amount will be deemed to be a capital gain and the adjusted cost base of the Unit tothe Holder will be increased above zero by the amount of such deemed capital gain.

Provided that appropriate designations are made by an ETF, such portion of the net realized taxable capital gains ofthe ETF; the taxable dividends received or deemed to be received by the ETF on shares of taxable Canadiancorporations; the foreign source income of the ETF as is paid or becomes payable to a Holder; and the amount offoreign taxes paid or deemed to be paid by the ETF, if any, will effectively retain their character and be treated assuch in the hands of the Holder for purposes of the Tax Act. A Holder may be entitled to claim a foreign tax creditin respect of foreign taxes designated to such Holder in accordance with the detailed rules in the Tax Act. To theextent that amounts are designated as taxable dividends from taxable Canadian corporations, the gross-up anddividend tax credit rules will apply.

Any loss of an ETF for purposes of the Tax Act cannot be allocated to, and cannot be treated as a loss of, a Holder.

Under the Tax Act, an ETF is permitted to deduct, in computing its income for a taxation year, an amount that is lessthan the amount of its distributions for the year. This will enable an ETF to use, in a taxation year, losses from prioryears without affecting the ability of the ETF to distribute its income annually. In such circumstances, the amountdistributed to a Holder of an ETF, but not deducted by the ETF, will not be included in the Holder’s income.However, the adjusted cost base of a Holder’s Units in the ETF will be reduced by such amount.

On the disposition or deemed disposition of a Unit of an ETF, including on a redemption, a Holder will realize acapital gain (or capital loss) to the extent that the Holder’s proceeds of disposition (other than any amount payable by the ETF which represents an amount that is otherwise required to be included in the Holder’s income asdescribed herein), net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of theUnit of the ETF. For the purpose of determining the adjusted cost base of a Holder’s Units of an ETF, whenadditional Units of the ETF are acquired by the Holder, the cost of the newly acquired Units of the ETF will be

averaged with the adjusted cost base of all Units of the ETF owned by the Holder as capital property immediately before that time. For this purpose, the cost of Units of the ETF that have been issued on a distribution will generally be equal to the amount of the net income or capital gain distributed to the Holder of the ETF that has beendistributed in the form of additional Units of the ETF. A consolidation of Units of an ETF following a distribution paid in the form of additional Units of the ETF will not be regarded as a disposition of Units of the ETF and will notaffect the aggregate adjusted cost base to a Holder. Based on the current published administrative policies andassessing practices of the CRA, a conversion of Advisor Class Units into Class E Units of the same ETF or aconversion of Class E Units into Advisor Class Units of the same ETF should not constitute a disposition of Unitsfor purposes of the Tax Act.



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In the case of an exchange of Units for a Basket of Securities, a Holder’s proceeds of disposition of Units wouldgenerally be equal to the aggregate of the fair market value of the distributed property and the amount of any cashreceived, less any capital gain realized by the ETF on the disposition of such distributed property. The cost to aHolder of any property received from the ETF upon the exchange will generally be equal to the fair market value ofsuch property at the time of the distribution.

Pursuant to the Trust Declaration, an ETF may allocate and designate any income or capital gains realized by theETF as a result of any disposition of property of the ETF undertaken to permit or facilitate the redemption of Unitsto a Unitholder whose Units are being redeemed. In addition, each ETF has the authority to distribute, allocate anddesignate any income or capital gains of the ETF to a Unitholder who has redeemed Units of the ETF during a yearin an amount equal to the Unitholder’s share, at the time of redemption, of the ETF’s income and capital gains forthe year or such other amount that is determined by the ETF to be reasonable. Any such allocations will reduce theredeeming Unitholder’s proceeds of disposition for tax purposes.

In general, one-half of any capital gain (a “taxable capital gain”) realized by a Holder on the disposition of Units ofan ETF, or designated by the ETF in respect of the Holder, in a taxation year will be included in computing theHolder’s income for that year and one-half of any capital loss realized by the Holder in a taxation year may bededucted from taxable capital gains realized by the Holder, or designated by the ETF in respect of the Holder, inaccordance with the detailed provisions of the Tax Act.

A Holder will be required to compute all amounts, including the adjusted cost base of Units of the applicable ETFand proceeds of disposition, in Canadian dollars for purposes of the Tax Act, using the appropriate exchange rateand accordingly a Holder who acquires Units in U.S. dollars may realize gains or losses by virtue of the fluctuationin the value of the U.S. dollar relative to the Canadian dollar.

Amounts designated by an ETF to a Holder of the ETF as taxable capital gains or dividends from taxable Canadiancorporations and taxable capital gains realized on the disposition of Units of an ETF may increase the Holder’sliability for alternative minimum tax.

Taxation of Registered Plans

Distributions received by Plans on Units while the Units are a qualified investment for such Plans will be exemptfrom income tax in the plan, as will capital gains realized by the Plan on the disposition of such Units. Withdrawals

from Plans (other than a TFSA) are generally subject to tax under the Tax Act. Unitholders should consult their ownadvisors regarding the tax implications of establishing, amending, terminating or withdrawing amounts from a Plan.

If Units are “prohibited investments”, a Unitholder who holds Units in a TFSA, RRSP or RRIF will be subject to anadditional tax as set out in the Tax Act. A “prohibited investment” includes a unit of a trust which does not deal atarm’s length with the holder, or in which the holder has a significant interest. A significant interest, in generalterms, means the ownership of 10% or more of the value of an ETF’s outstanding Units by the holder, either aloneor together with persons and partnerships with whom the holder does not deal at arm’s length. Unitholders areadvised to consult their own tax advisors regarding the status of their Units under the “prohibited investment” rules.

Tax Implications of the ETF’s Distribution Policy

The net asset value per Unit of an ETF will, in part, reflect any income and gains of the ETF that it has accrued or

realized, but have not been made payable at the time Units of the ETF were acquired by a Holder. Accordingly, aHolder of an ETF who acquires Units of the ETF, including on a reinvestment of distributions, may become taxableon the Holder’s share of income and gains of the ETF that accrued before Units of the ETF were acquired. In particular, an investor who acquires Units of the ETF at any time in the year prior to a distribution being paid ormade payable will have to pay tax on the entire distribution (to the extent it is a taxable distribution), regardless ofthe fact that the investor only recently acquired such Units.



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ORGANIZATION AND MANAGEMENT DETAILS OF THE ETFs

Manager of the ETFs

AlphaPro is the manager and trustee of the ETFs and its principal office is at 26 Wellington Street East, Suite 700,

Toronto, Ontario, M5E 1S2. The Manager is an innovative financial services company and was primarily organizedfor the purpose of managing investment products, including exchange traded funds.

AlphaPro is a subsidiary of Horizons. The Horizons ETFs family includes a broadly diversified range of investmenttools with solutions for investors of all experience levels. AlphaPro and Horizons are subsidiaries of Mirae Assetand an affiliate of NBF also holds a minority interest in AlphaPro.

Mirae Asset is the Korea-based asset management entity of Mirae Asset Financial Group, one of the world's largestinvestment managers in emerging market equities. With over 560 employees, including more than 80 investment professionals (as of January 31, 2013), Mirae Asset has a presence in Australia, Brazil, Canada, China, Colombia,Hong Kong, India, Korea, Taiwan, the United Kingdom, the United States, and Vietnam. Headquartered in Seoul,South Korea, Mirae Asset manages approximately US$57.2 billion in assets globally as of January 31, 2013.

The Manager performs or arranges for the performance of management services for the ETFs, is responsible for the

administration of the ETFs and has retained the Investment Manager pursuant to the Trust Declaration. TheManager is entitled to receive fees as compensation for management services rendered to the ETFs. See “Duties andServices to be Provided by the Manager” at page 45 and “Fees and Expenses” at page 20.

Officers and Directors of the Manager

The name, municipality of residence, office and principal occupation of the officers and directors of the Manager areas follows:

Name and

Municipality of

Residence Position with

the Manager Principal Occupation

Thomas Park

Clayton, Missouri

Director Director, AlphaPro (since 2011); Director, Horizons (Since 2011);

Executive Managing Director, Mirae Asset MAPS Global Investments(since 2008); Associate, Goldman Sachs International (2006, 2007-2008); Senior Consultant, KPMG Consulting (Bearing Point) (2001-2005).

Taeyong LeeFrederick, Maryland

ExecutiveChairman andDirector

Executive Chairman and Director, AlphaPro (since 2011); ExecutiveChairman and Director, Horizons (since 2011); Executive VicePresident, Mirae Asset MAPS Global Investments (since 2010);Managing Director, Leading Securities Inc. (2008-2010); Director ofPortfolio, ProFund Group (1999-2008).

Laurent FerreiraWestmount, Quebec

Director Director, AlphaPro (since 2010); Executive Vice President andManaging Director, Derivatives, National Bank Financial Group (since2006); previously, Director, National Bank of Canada (Global)

Limited (2006-2010)



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Name and

Municipality of



Michel FalkLachine, Quebec

Director Director, AlphaPro (since 2012); Senior Vice President, InvestmentSolutions and Trust Services, President and Chief Executive Officer,

National Bank Securities Inc. (since 2012); President and ChiefExecutive Officer, National Bank Trust Inc. (since 2012); previously,Chief Investment Officer, Natcan Investment Management Inc. (2008-2012); Senior Vice President and Managing Director, PortfolioManagement, National Bank Financial Inc. (2007-2008); andExecutive Vice President, NBF Private Wealth Management (2007-2008).

Adam FeleskyToronto, Ontario

Chief ExecutiveOfficer andDirector

Chief Executive Officer and Director, AlphaPro (since 2008); ChiefExecutive Officer and Director, Horizons (since 2005); ChiefExecutive Officer and Director, the Investment Manager (since 2005);Chairman and Director, Horizons Exchange Traded Funds Inc.(“Horizons ETFs”) (since 2008); previously, Chief Executive Officerand Director, JovFunds Management Inc. (“JovFunds”) (2008-2011);Partner, Bradbrooke Capital Holdings Inc. (commodity trading firm)(2003-2004); Associate, JP Morgan Securities Inc. (2001-2003).

Howard AtkinsonToronto, Ontario

President andDirector

President and Director, AlphaPro (since 2008); President and Director,Horizons (since 2006); President, Chief Executive Officer andDirector, Horizons ETFs (since 2008); previously, Managing Partnerand Director, JovFunds (2008-2011); Head of Business Development,Exchange Traded Products, Barclays Global Investors Canada Ltd.(2000-2006).

Robert SheaPoughkeepsie, NewYork

Chief FinancialOfficer andDirector

Chief Financial Officer and Director, AlphaPro (since 2012); ChiefFinancial Officer and Director, Horizons (since 2012); Chief FinancialOfficer, the Investment Manager (since 2012); Chief Financial Officer,Horizons ETFs (since 2012); Chief Operating Officer, Mirae Asset

Global Investments (USA) LLC (since 2009); Chief Financial Officer,Gradient Partners LP (2004-2009).

Steven J. HawkinsOakville, Ontario

SeniorExecutive VicePresident andSecretary

Senior Executive Vice President and Secretary, AlphaPro (since 2009);Senior Executive Vice President and Secretary, Horizons (since 2009);President, Chief Compliance Officer, Secretary and Director, theInvestment Manager (since 2007); Senior Executive Vice Presidentand Secretary, Horizons ETFs (since 2007); previously, ManagingPartner and Director, JovFunds (2005-2011); Vice President,Compliance, AMG Canada Inc. and Senior Vice President,Compliance and Risk Management and Chief Investment Officer, FirstAsset Investment Management Inc. (2000-2005).

Kevin S. Beatson

Oakville, Ontario

Chief Operating

Officer andChiefComplianceOfficer

Chief Operating Officer and Chief Compliance Officer, AlphaPro

(since 2009); Chief Operating Officer and Chief Compliance Officer,Horizons (since 2009); Chief Operating Officer and Director, theInvestment Manager (since 2010); Chief Operating Officer and ChiefCompliance Officer, Horizons ETFs (since 2009); previously, ChiefOperating Officer, JovFunds (2006-2011).

Jaime P.D. PurvisToronto, Ontario

Executive VicePresident, NationalAccounts

Executive Vice President, National Accounts, AlphaPro (since 2009);Executive Vice President, National Accounts, Horizons (since 2009);Executive Vice President, National Accounts, Horizons ETFs (since2006).



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Name and

Municipality of



Faizan DhananiToronto, Ontario

Executive VicePresident, Retail

Sales

Executive Vice President, Retail Sales, AlphaPro (since 2009);Executive Vice President, Retail Sales, Horizons (since 2009);

Executive Vice President, Head of Sales, Horizons ETFs (since 2009); previously, Vice President, Sales, JovFunds Inc. (2006-2009).

Where a person has held multiple positions within a company, the above table sets out only the current or mostrecently held position or positions held at that company, and the start dates refer to the date of the first position heldor the first of the listed positions held by the person at that company. Each director will hold his or her position untilthe next annual general meeting of the Manager at which time he/she may be re-elected.

Duties and Services to be Provided by the Manager

Pursuant to the Trust Declaration, the Manager has full authority and responsibility to manage and direct the business and affairs of the ETFs, to make all decisions regarding the business of the ETFs and to bind the ETFs.The Manager may delegate certain of its powers to third parties where, in the discretion of the Manager, it would be

in the best interests of the ETFs to do so.

The Manager’s duties include negotiating contracts with certain third-party service providers, including, but notlimited to, investment managers, custodians, registrars, transfer agents, auditors and printers; authorizing the payment of operating expenses incurred on behalf of the ETFs; arranging for the maintenance of accounting recordsfor the ETFs; preparing the reports to Unitholders of the ETFs and to the applicable Securities RegulatoryAuthorities; calculating the amount and determining the frequency of distributions by the ETFs; preparing financialstatements, income tax returns and financial and accounting information as required by the ETFs; ensuring thatUnitholders of the ETFs are provided with financial statements and other reports as are required from time to time by applicable law; ensuring that the ETFs comply with all other regulatory requirements including the continuousdisclosure obligations of the ETFs under applicable securities laws; administering purchases, redemptions and othertransactions in Units of the ETFs; arranging for any payments required upon termination of the ETFs; and dealingand communicating with Unitholders of the ETFs. The Manager will provide office facilities and personnel to carry

out these services, if not otherwise furnished by any other service provider to the ETFs. The Manager will alsomonitor the investment strategy of each ETF to ensure that each ETF complies with its investment objective,investment strategies and investment restrictions and practices.

The Manager is required to exercise its powers and discharge its duties honestly, in good faith and in the bestinterests of the Unitholders of the ETFs, and, in connection therewith, to exercise the care, diligence and skill that areasonably prudent person would exercise in comparable circumstances. The Trust Declaration provides that theManager will not be liable to an ETF, any Unitholder of the ETF or any other person for any loss or damage relatingto any matter regarding the ETF, including any loss or diminution of value of the assets of the ETF, if it has satisfiedits standard of care set forth above.

The Manager and each of its directors, officers, employees and agents may be indemnified out of the assets of anETF from, and against, all claims whatsoever, including costs, charges and expenses in connection therewith, brought, commenced or prosecuted against it for, or in respect of, any act, deed, matter or thing whatsoever made,done or omitted in, or in relation to, the execution of its duties to the ETF as long as the person acted honestly and ingood faith with a view to the best interests of the ETF.

The Manager may resign upon 90 days’ prior written notice to the Trustee or upon such lesser notice period as theTrustee may accept. The Manager may also be removed by the Trustee on at least 90 days’ written notice to theManager. The Trustee shall make every effort to select and appoint a successor manager prior to the effective dateof the Manager’s resignation. As compensation for the management services it provides to an ETF, the Manager isentitled, under the Trust Declaration, to receive a Management Fee from the ETF and will be reimbursed for allreasonable costs and expenses incurred on behalf of the ETFs. See “Fees and Expenses” at page 20.



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The Manager may, in its discretion, terminate an ETF without the approval of Unitholders if, in its opinion, it is nolonger economically feasible to continue the ETF and/or it would otherwise be in the best interests of Unitholders toterminate the ETF.

The administration and management services of the Manager under the Trust Declaration are not exclusive andnothing in the Trust Declaration prevents the Manager from providing similar administrative and managementservices to other investment funds and other clients (whether or not their investment objectives and policies are

similar to those of the ETFs) or from engaging in other activities.

Investment Manager

Horizons Investment Management Inc. is an affiliate of the Manager and has been retained to provide investmentadvisory and portfolio management services to the ETFs and to implement the ETFs’ investment strategies and toengage the services of the Sub-Advisor to act as sub-advisor to the ETFs. Based in Ontario, the Investment Manageroperates as a portfolio manager in Ontario under the Securities Act (Ontario) and in certain other provinces pursuantto applicable legislation and as a commodity trading manager under the Commodity Futures Act (Ontario). The principal office of the Investment Manager is at 26 Wellington Street East, Suite 608, Toronto, Ontario M5E 1S2.The Investment Manager does not maintain offices in any jurisdiction, other than Ontario. The Investment Managerwas incorporated under the Business Corporations Act (Ontario) on July 10, 1997. The Investment Manager provides investment advisory services to a broad range of clients, including public mutual funds. Pursuant to theInvestment Management Agreement, the Investment Manager has the authority to engage a sub-advisor for the

purposes of assisting the Investment Manager in performing its duties as the investment manager and may, to theextent it deems appropriate, delegate any of its powers and duties as the investment manager to such sub-advisor.

The Investment Manager and Manager are subsidiaries of Mirae Asset and are affiliates.

Certain Officers and Directors of the Investment Manager

The name, municipalities of residence and position of the senior officers and directors of the Investment Manager principally responsible for providing advice to the ETFs are as follows:

Name and

Municipality of

Residence

Position with the Investment

Manager

Principal Occupation

Steven J. HawkinsOakville, Ontario

President, Chief ComplianceOfficer, Secretary and Director

President, Chief Compliance Officer, Secretary andDirector, the Investment Manager (since 2007); SeniorExecutive Vice President and Secretary, AlphaPro (since2009); Senior Executive Vice President and Secretary,Horizons (since 2009); Senior Executive Vice Presidentand Secretary, Horizons ETFs (since 2007); previously,Managing Partner and Director, JovFunds (2005-2011);Vice President, Compliance, AMG Canada Inc. and SeniorVice President, Compliance and Risk Management andChief Investment Officer, First Asset InvestmentManagement Inc. (2000-2005).

Where a person has held multiple positions within a company, the above table sets out only the current or mostrecently held position or positions held at that company, and the start dates refer to the date of the first position heldor the first of the listed positions held by the person at that company. A director will hold his position until the nextannual general meeting of the Investment Manager at which time he may be re-elected.

Details of the Investment Management Agreement

The Investment Manager is responsible for implementing the ETFs’ investment strategies pursuant to the InvestmentManagement Agreement. Decisions as to the purchase and sale of securities and as to the execution of all portfolio



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and other transactions will be made by the Investment Manager. In the purchase and sale of securities for an ETF,the Investment Manager will seek to obtain overall services and prompt execution of orders on favourable terms.

Under the Investment Management Agreement, the Investment Manager is required to act at all times on a basiswhich is fair and reasonable to the ETFs, to act honestly and in good faith with a view to the best interests of theETFs and, in connection therewith, to exercise the degree of care, diligence and skill that a reasonably prudentinvestment counsellor would exercise in comparable circumstances. The Investment Management Agreement provides that the Investment Manager shall not be liable in any way for any default, failure or defect in any of thesecurities comprising an investment portfolio of the ETFs, nor shall it be liable if it has satisfied the duties andstandard of care, diligence and skill set forth above. The Investment Management Agreement also requires theManager to indemnify the Indemnified Persons, against all losses, damages, costs and expenses incurred by any ofthem in connection with the Manager’s administration of an ETF, unless an Indemnified Person is finallyadjudicated to have committed an act or omission involving wilful misconduct, bad faith or negligence.

The Investment Management Agreement will continue with respect to an ETF until the termination of the ETFunless terminated as described below. The Manager may terminate the Investment Management Agreement:(i) upon 10 days’ prior written notice to the Investment Manager; (ii) in the event that the Investment Manager is in breach or default of the Investment Management Agreement and, if capable of being cured, the breach or default hasnot been cured within 20 business days’ written notice of such breach or default being given by the Manager to theInvestment Manager; (iii) if there is a dissolution or the commencement of the winding-up of the Investment

Manager; (iv) if the Investment Manager becomes bankrupt or insolvent or makes a general assignment for the benefit of its creditors or a receiver is appointed in respect of the Investment Manager or a substantial portion of itsassets; (v) if the assets of the Investment Manager become subject to seizure or confiscation by any public orgovernmental organization; or (vi) if the Investment Manager is no longer registered or has failed to obtain anyregistration, license or other authorization required by it to perform the services delegated to it thereunder.

The Investment Manager may terminate the Investment Management Agreement upon 30 days’ prior written noticeto the Manager. The Investment Manager may also terminate the Investment Management Agreement with respectto an ETF immediately: (i) if the ETF is terminated; (ii) if the Manager or any of its affiliates is no longer themanager of the ETF; (iii) if there is a dissolution or the commencement of the winding-up of the Manager; (iv) if theManager becomes bankrupt or insolvent or makes a general assignment for the benefit of its creditors or a receiver isappointed in respect of the Manager or a substantial portion of its assets; (v) if the assets of the Manager becomesubject to seizure or confiscation by any public or governmental organization; or (vi) in the event that the Manager

is in breach or default of the Investment Management Agreement and, if capable of being cured, the breach ordefault has not been cured within 20 business days’ written notice of such breach or default being given by theInvestment Manager to the Manager.

In the event that the Investment Management Agreement is terminated as provided above, the Manager shall promptly appoint a successor investment manager to carry out the activities of the Investment Manager.

The Manager is responsible for the payment of all fees owing to the Investment Manager.

Duties and Services to be Provided by the Sub-Advisor

About the Sub-Advisor

The Sub-Advisor has been appointed sub-advisor of the ETFs by the Investment Manager to make and executeinvestment decisions on behalf of the ETFs. The Sub-Advisor is registered as an investment adviser with the U.S.Securities and Exchange Commission and as a commodity trading adviser with the U.S. Commodity FuturesTrading Commission. The Sub-Advisor is a limited partnership organized under the laws of the State of Delawareon January 10, 2007. The principal office of the Sub-Advisor is located at 1414 Second Street, Santa Monica,California, USA 90401.

The Sub-Advisor, founded in January 2007 by Chief Investment Officer Mark Spitznagel, is an investmentmanagement firm that specializes in convex tail hedging and investing, ranging from hedging stock market crashes



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and inflation to macro and equity options strategies. The Sub-Advisor’s investment philosophy was refined withover a decade of implementation and cumulative, incremental development of its focused, positive asymmetricinvestment approach. The Sub-Advisor has thus created an innovative investment niche and risk managementmethodology within an increasingly homogeneous industry.

Biographies of Key Personnel of the Sub-Advisor

Damir DelicPortfolio Manager

Damir Delic is the Sub-Advisor’s Portfolio Manager. As such, Mr. Delic is solelyresponsible for implementing the investment strategy of the ETFs and has soleresponsibility and final authority for overseeing and managing the ETFs’ tradingand their portfolios, including all investment and trading decisions relating to thatstrategy. Before joining the Sub-Advisor in 2009, Mr. Delic was a Senior VicePresident within the proprietary group of KBC Financial Products (the ex-subsidiary of D.E. Shaw) (“KBC”). From 2005-2008, he was responsible forstructuring and distributing the risks of that firm’s insurance derivatives book, co-running the relative value volatility strategies within its $1.5B hedge fund (AIM),and establishing and implementing in-house relative value arbitrage software andanalytical parameters used in their strategies. From 2000 to 2005, he worked as proprietary trader on KBC’s market making desk in both listed and exotic equity

options, and also was responsible for overseeing the funding of the New York branch of KBC in US Treasuries and in US Equity swaps. Mr. Delic hasexperience trading volatility products from OTC options, variance swaps, barrieroptions, equity-linked notes, convertible bonds, dividend swaps and creditderivatives. Mr. Delic graduated from the University of Indianapolis in 1999, inaffiliation with the University of Nicosia (Cyprus).

Mark SpitznagelPresident and ChiefInvestment Officer

Mark W. Spitznagel is the President and Chief Investment Officer of the Sub-Advisor. Mr. Spitznagel created the investment strategy that the Sub-Advisorintends to follow with respect to the ETFs. Due to his substantial othercommitments, however, Mr. Spitznagel is not involved in managing or reviewingthe ETFs’ portfolios or monitoring the ETFs’ investments or trading. Prior toforming the Sub-Advisor in January 2007, Mr. Spitznagel was a Vice President andHead of Options Trading (in the Process Driven Trading Group) at Morgan Stanleyin New York, New York, from January 2006 to January 2007. From November1999 through July 2005, Mr. Spitznagel was the President and Head Trader atEmpirica Capital in New York, New York, a derivatives trading firm. FromJanuary 1997 through March 1999, Mr. Spitznagel was a Vice President atEastbridge Capital (a subsidiary of Nippon Credit Bank), in New York, New York,where he was a proprietary options trader. Mr. Spitznagel began his trading careeras an independent floor trader and an exchange member at the Chicago Board ofTrade in Chicago, Illinois, from July 1993 through December 1996. Mr. Spitznagelalso founded Pit Risk Software (a risk management software company) in July1990, which he managed until December 1996. Mr. Spitznagel was born in 1971,attended the Courant Institute of Mathematical Sciences at New York Universityfrom 1999-2002, and received his M.S. in Mathematics/Finance in 2005. Hereceived his B.A. in Political Science/Mathematics from Kalamazoo College in

Kalamazoo, Michigan in 1993.

Nassim NicholasTalebDistinguishedScientific Advisor

Nassim Nicholas Taleb is the Distinguished Scientific Advisor to the Sub-Advisor, but is not involved in managing or reviewing the ETFs’ portfolios or monitoring theETFs’ investments or trading. Dr. Taleb is considered the premier specialist ofBlack Swans and has advised heads of states, top financial institutions, and variouscentral banks on tail risks. He is the author of Fooled by Randomness, The BlackSwan, and The Bed of Procrustes: Philosophical & Practical Aphorisms, whichhave been translated into over 32 languages. Dr. Taleb has held senior trading and



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managing director positions at investment banks. Currently, he is a DistinguishedProfessor of Risk Engineering at New York University Polytechnic Institute.

Details of the Sub-Advisory Agreement

The Sub-Advisory Agreement will continue until terminated in accordance with the termination provisions set out

below.

The Manager or the Investment Manager may terminate the Sub-Advisory Agreement: (i) upon ninety (90) dayswritten notice to the Sub Advisor; (ii) upon a dissolution and commencement of winding up of the Sub-Advisor; (iii)if the Sub-Advisor becomes bankrupt, insolvent or makes a general assignment for the benefit of its creditors, or areceiver is appointed in respect of the Sub-Advisor or a substantial portion of its assets; (iv) if the assets of the Sub-Advisor have become subject to seizure or confiscation by any public or governmental organization; (v) if the Sub-Advisor has lost any registration, licence or other authorization required by it to perform the services delegated to itunder the Sub-Advisory Agreement; (vi) if the Investment Management Agreement is terminated; or (vii) if the Sub-Advisor is in material breach or material default of any provision of the Sub-Advisory Agreement and, if capable of being cured, the breach or default has not been cured within twenty (20) business days of written notice of such breach or default given by the Manager or Investment Manager to the Sub-Advisor.

The Sub-Advisor may terminate the Sub-Advisory Agreement: (i) at any time upon giving the Manager and theInvestment Manager ninety (90) days’ prior written notice; (ii) there is a dissolution and commencement of winding-up of the Manager or Investment Manager; (iii) if the Manager or Investment Manager becomes bankrupt, insolventor makes a general assignment for the benefit of its creditors, or a receiver is appointed in respect of the Manager orInvestment Manager or a substantial portion of either of their assets; (iv) if the assets of the Manager or InvestmentManager become subject to seizure or confiscation by any public or governmental organization; (v) the ETFs areterminated; (vi) if the Manager or Investment Manager is in material breach or material default of any provision ofthis Agreement and, if capable of being cured, the breach or default has not been cured within twenty (20) businessdays of written notice of such breach or default given by the Sub-Advisor to the Manager or Investment Manager; or(vii) the occurrence of any event which, pursuant to applicable law, would disqualify the Sub-Advisor from performing its duties under the Sub-Advisory Agreement or of any investigation (other than routine examinations orinspections) of any of its activities by any applicable regulatory authority that is reasonably likely to affect thePortfolio Sub-Advisor’s ability to perform its obligations under this Agreement.

The Investment Manager has agreed that it will be responsible for the investment advice the Sub-Advisor providesto the ETFs and for any losses that the ETFs may incur if the Sub-Advisor breaches its standard of care. As the Sub-Advisor is located in the United States, and as all or a substantial portion of its assets are located outside of Canada,there may be difficulty enforcing any legal rights against it.

The Sub-Advisory Agreement contains covenants and indemnities applicable to the Sub-Advisor that are similar tothose of the Investment Manager in the Investment Management Agreement.

In the event that the Sub-Advisory Agreement is terminated as provided above, the Investment Manager shall either:(i) itself carry out the activities that it had previously delegated to the Sub-Advisor; or (ii) promptly appoint asuccessor sub-advisor to carry out the activities of the Sub-Advisor.

The Manager is responsible for the payment of all fees owing to the Sub-Advisor.

Designated Brokers

The Manager has entered into a Designated Broker Agreement with a Designated Broker on behalf of the ETFs.Under the Designated Broker Agreement, the Designated Broker will agree to perform certain duties relating to theETFs including, without limitation: (i) to subscribe for a sufficient number of Units of that ETF to satisfy the TSX’soriginal listing requirements; (ii) to subscribe for Units of that ETF on an ongoing basis, and (iii) to post a liquid twoway market for the trading of Units of that ETF on the TSX. Payment for Units of an ETF must be made by the



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Designated Broker and Units of the ETF will be issued by no later than the third Trading Day after the subscriptionnotice has been delivered.

A Designated Broker may terminate its Designated Broker Agreement at any time by giving AlphaPro at least six(6) months’ prior written notice of such termination. AlphaPro may terminate a Designated Broker Agreement atany time, without prior notice, by sending a written notice of termination to the Designated Broker.

Units do not represent an interest in, or an obligation of, any Designated Broker or Dealer or any affiliate thereofand a Unitholder of an ETF will not have any recourse against any such parties in respect of amounts payable by theETF to the Unitholder.

Conflicts of Interest

The Manager, the Investment Manager, and their respective principals and affiliates (each an “ ETF Manager”) donot devote their time exclusively to the management of the ETFs. The ETF Managers perform similar or differentservices for others and may sponsor or establish other investment funds (public and private) during the same periodthat they act on behalf of the ETFs. The ETF Managers therefore will have conflicts of interest in allocatingmanagement time, services and functions to the ETFs and the other persons for which they provide similar services.

The ETF Managers may trade and make investments for their own accounts, and such persons currently trade andmanage and will continue to trade and manage accounts other than an ETF’s accounts utilizing trading andinvestment strategies which are the same as, or different from, the ones to be utilized in making investmentdecisions for the ETF. In addition, in proprietary trading and investment, the ETF Managers may take positions thesame as, different than or opposite to those of an ETF. Furthermore, all of the positions held by accounts owned,managed or controlled by the Investment Manager will be aggregated for purposes of applying certain exchange position limits. As a result, an ETF may not be able to enter into or maintain certain positions if such positions,when added to the positions already held by the ETF and such other accounts, would exceed applicable limits. Allof such trading and investment activities may also increase the level of competition experienced with respect to priorities of order entry and allocations of executed trades. See “Risk Factors” at page 22.

In evaluating these conflicts of interest, potential investors should be aware that the ETF Managers have aresponsibility to the Unitholders to exercise good faith and fairness in all dealings affecting the ETFs. In the eventthat a Unitholder of an ETF believes that one of the ETF Managers has violated its duty to such Unitholder, the

Unitholder may seek relief for itself or on behalf of the ETF to recover damages from, or to require an accounting by, the applicable ETF Manager. Unitholders should be aware that the performance by an ETF Manager of itsresponsibilities to an ETF will be measured in accordance with: (i) the provisions of the agreement by which theETF Manager has been appointed to its position with the ETF; and (ii) applicable laws.

NBF, which holds an indirect minority interest in the Manager, acts or may act as a Designated Broker, a Dealerand/or a registered trader (market maker). These relationships may create actual or perceived conflicts of interestwhich investors should consider in relation to an investment in an ETF. In particular, by virtue of theserelationships, NBF may profit from the sale and trading of Units. NBF, as market maker of the ETFs in thesecondary market, may therefore have economic interests which differ from, and may be adverse to, those ofUnitholders.

The ETFs are not sponsored, endorsed, or promoted by NBF. NBF does not make any representation or warranty,

express or implied, to the Unitholders regarding the advisability of investing in the ETFs, nor does it assume anyliability in connection with the administration, marketing or trading of the ETFs. NBF’s potential roles as aDesignated Broker and/or a Dealer of the ETFs will not be as an underwriter of the ETFs in connection with thedistribution of Units under this prospectus. The Designated Brokers and Dealers are not underwriters of the ETFs inconnection with the distribution by the ETFs of Units under this prospectus. The Securities Regulatory Authoritieshave provided the ETFs with a decision exempting the ETFs from the requirement to include a certificate of anunderwriter in the prospectus. No Designated Broker and/or Dealer has been involved in the preparation of this prospectus nor has any Designated Broker and/or Dealer performed any review of the contents of this prospectus.



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NBF and its affiliates may, at present or in the future, engage in business with the ETFs, the issuers of securitiesmaking up the investment portfolio of the ETFs, or with the Manager or any funds sponsored by the Manager or itsaffiliates, including by making loans, entering into derivative transactions or providing advisory or agency services.In addition, the relationship between NBF and its affiliates, and the Manager and its affiliates may extend to otheractivities, such as being part of a distribution syndicate for other funds sponsored by the Manager or its affiliates.

The index funds in which the ETFs may invest may be managed by the Manager or its affiliates.

Independent Review Committee

NI 81-107 requires that all publicly offered investment funds, such as the ETFs, establish an IRC. The Managermust refer all conflict of interest matters for review or approval to the IRC. NI 81-107 also requires the Manager toestablish written policies and procedures for dealing with conflict of interest matters, to maintain records in respectof these matters and to provide the IRC with guidance and assistance in carrying out its functions and duties.According to NI 81-107, the IRC must be comprised of a minimum of three (3) independent members, and is subjectto requirements to conduct regular assessments of its members and provide reports, at least annually, to each ETFand to its Unitholders in respect of those functions. The most recent report prepared by the IRC is available on theManager’s website (www.HorizonsETFs.com), or at a Unitholder’s request at no cost, by contacting an ETF at 26Wellington Street East, Suite 700, Toronto, Ontario M5E 1S2; telephone: 416-933-5745; toll free: 1-866-641-5739;fax: 416-777-5181.

Warren Law, Sue Fawcett and Michael Gratch have been appointed to the IRC.

The IRC:

reviews and provides input on the Manager’s written policies and procedures that deal with conflict ofinterest matters;

reviews conflict of interest matters referred to it by the Manager and makes recommendations to theManager regarding whether the Manager’s proposed actions in connection with the conflict of interestmatter achieves a fair and reasonable result for the ETF;

considers and, if deemed appropriate, approves the Manager’s decision on a conflict of interest matter that

the Manager refers to the IRC for approval; and

performs such other duties as may be required of the IRC under applicable securities laws.

The ETFs will compensate the IRC members for their participation on the IRC through member fees and, ifapplicable, meeting fees. Sue Fawcett and Michael Gratch receive $5,000 per year in member fees, while WarrenLaw, as chairperson of the IRC, receives $7,500 per year. The IRC’s secretariat receives $20,000 per year foradministrative services. An additional fee of $3,000 per meeting is charged by the IRC for each IRC meeting inexcess of two per year. The total fees payable in respect of the IRC by a particular ETF is calculated by dividing thetotal net assets of the particular ETF by the total net assets of all of the mutual funds for which the IRC isresponsible and then multiplying the resulting value by the total dollar value due to the IRC member by the ETF forthat particular period.

The Trustee

AlphaPro is also the trustee of the ETFs pursuant to the Trust Declaration. The Trustee may resign and bedischarged from all further duties under the Trust Declaration upon 90 days’ prior written notice to the Manager orupon such lesser notice as the Manager may accept. The Manager shall make every effort to select and appoint asuccessor trustee prior to the effective date of the Trustee’s resignation. If the Manager fails to appoint a successortrustee within 90 days after notice is given or a vacancy occurs, the Manager shall call a meeting of Unitholders ofthe ETFs within 60 days thereafter for the purpose of appointing a successor trustee. If there is no manager, fiveUnitholders of an ETF may call a meeting of Unitholders of the ETF within 31 days after notice is given or a



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vacancy occurs for the purpose of appointing a successor trustee. In each case, if, upon the expiry of a further 30days, neither the Manager nor the Unitholders of an ETF have appointed a successor trustee, the ETF shall beterminated and the property of the ETF shall be distributed in accordance with the terms of the Trust Declaration.

The Trustee is required to exercise its powers and discharge its duties honestly, in good faith and in the best interestsof the ETFs, and to exercise the degree of care, diligence and skill that a reasonably prudent person would exercisein comparable circumstances. The Trust Declaration provides that the Trustee will not be liable in carrying out itsduties under the Trust Declaration as long as the Trustee has adhered to its standard of care set out above. Inaddition, the Trust Declaration contains other customary provisions limiting the liability of the Trustee andindemnifying the Trustee in respect of certain liabilities incurred by it in carrying out its duties.

The Trustee will not receive any fees from the ETFs but will be reimbursed for all expenses and liabilities that it properly incurs in carrying out activities on behalf of the ETFs.

Custodian

CIBC Mellon Trust is the custodian of each ETF’s assets pursuant to the Custodian Agreement. The Custodian islocated in Toronto, Ontario. Pursuant to the Custodian Agreement, the Custodian is required to exercise its dutieswith the degree of care, diligence and skill that a reasonably prudent person would exercise in the samecircumstances.

Under the Custodian Agreement, an ETF shall pay fees to the Custodian at such rate as determined by the partiesfrom time to time and the Custodian shall be reimbursed for all reasonable expenses incurred in the performance ofits duties under the Custodian Agreement. Each ETF shall also indemnify and hold harmless the Custodian, CIBCMellon Global, Canadian Imperial Bank of Commerce, and the Bank of New York Mellon from any direct loss,damage or expense, including reasonable counsel fees and expenses, arising in connection with the CustodianAgreement, except to the extent such direct loss, damage or expense, including reasonable counsel fees andexpenses is caused by a breach of the Standard of Care by the Custodian, CIBC Mellon Global, Canadian ImperialBank of Commerce, and the Bank of New York Mellon, or a permitted agent or assignee of the foregoing.

The parties to the Custodian Agreement may terminate the Custodian Agreement without any penalty upon at leastninety (90) days’ written notice to the other parties, or immediately, if any party becomes insolvent, or makes anassignment for the benefit of creditors, or a petition in bankruptcy is filed by or against that party and is not

discharged within thirty (30) days, or proceedings for the appointment of a receiver for that party are commencedand not discontinued within thirty (30) days. The Manager may terminate the Custodian Agreement immediatelyupon written notice to the other parties and without penalty if the Custodian no longer satisfies the requirements toact as a custodian of the ETFs, as such requirements are set out in NI 81-102 and National Instrument 41-101 -General Prospectus Requirements.

Valuation Agent

The Manager has retained CIBC Mellon Global, to provide accounting services in respect of the ETFs pursuant to avaluation services agreement. CIBC Mellon Global is located in Toronto, Ontario.

Auditors

KPMG LLP is the auditor of the ETFs. The office of the Auditors is located at 333 Bay Street, Suite 4600, Toronto,Ontario, M5H 2S5.

Registrar and Transfer Agent

CIBC Mellon Trust, at its principal offices in Toronto, is also the registrar and transfer agent for each ETF pursuantto registrar and transfer agency agreements. CIBC Mellon Trust is independent of the Manager.



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Promoter

The Manager took the initiative in founding and organizing the ETFs and is accordingly the promoter of the ETFswithin the meaning of securities legislation of certain provinces and territories of Canada. The Promoter will notreceive any benefits, directly or indirectly, from the issuance of securities offered pursuant to this prospectus otherthan as described under “Fees and Expenses” at page 20.

Accounting and Reporting

An ETF’s fiscal year will be the calendar year or such other fiscal period permitted under the Tax Act as that ETFelects. The annual financial statements of an ETF shall be audited by that ETF’s auditors in accordance withCanadian generally accepted auditing standards. The auditors will be asked to report on the fair presentation of theannual financial statements in accordance with Canadian generally accepted accounting principles. The Managerwill arrange for an ETF’s compliance with all applicable reporting and administrative requirements.

The Manager will keep, or arrange for the keeping of, adequate books and records reflecting the activities of anETF. A Unitholder or his or her duly authorized representative will have the right to examine the books and recordsof an ETF during normal business hours at the offices of the Manager or such other location as the Manager shalldetermine. Notwithstanding the foregoing, a Unitholder shall not have access to any information that, in the opinionof the Manager, should be kept confidential in the interests of an ETF.

CALCULATION OF NET ASSET VALUE

The net asset value per unit of an ETF will be computed by adding up the cash, securities and other assets of theETF, less the liabilities and dividing the value of the net assets of the ETF by the total number of Units of the ETFthat are outstanding. The net asset value per Unit of an ETF so determined will be adjusted to the nearest cent perUnit and will remain in effect until the time as at which the next determination of the net asset value per Unit of theETF is made. The net asset value per Unit of an ETF will be calculated on each Valuation Date.

Typically, the net asset value per Unit of an ETF will be calculated at its applicable Valuation Time. The net assetvalue per Unit of an ETF may be determined at an earlier Valuation Time if the TSX and/or the principal exchangefor the securities held by the ETF closes earlier on that Valuation Date.

Valuation Policies and Procedures of the ETFs

The Manager will use the following valuation procedures in determining an ETF’s “net asset value” and “net asset

value per Unit” on each Valuation Date:

1. The value of any cash on hand, on deposit or on call, bills and notes and accounts receivable, prepaidexpenses, cash dividends to be received and interest accrued and not yet received, will be deemed to be theface amount thereof, unless the Manager determines that any such deposit, call loan, bill, note or accountreceivable is not worth the face amount thereof, in which event the value thereof will be deemed to be suchvalue as the Manager determines, on such basis and in such manner as may be approved by the board ofdirectors of the Manager to be the reasonable value thereof.

2. The value of any security, commodity or interest therein which is listed or dealt in upon a stock exchange

will be determined by:

(a) in the case of securities which were traded on that Valuation Date, the price of such securities asdetermined at the applicable Valuation Time; and

(b) in the case of securities not traded on that Valuation Date, a price estimated to be the true valuethereof by the Manager on such basis and in such manner as may be approved of by the board ofdirectors of the Manager, such price being between the closing asked and bid prices for the



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securities or interest therein as reported by any report in common use or authorized as official by astock exchange.

3. Long positions in clearing corporation options, options on futures, over-the-counter options, debt-likesecurities and listed warrants will be valued at the current market value thereof. Where a covered clearingcorporation option, option on futures or over-the-counter option is written, the premium received shall bereflected as a deferred credit which shall be valued at an amount equal to the current market value of theclearing corporation option, option on futures or over-the-counter option that would have the effect ofclosing the position. Any difference resulting from any revaluation shall be treated as an unrealized gain orloss on investment. The deferred credit shall be deducted in arriving at the net asset value of suchinstrument. The securities, if any, which are the subject of a written clearing corporation option or over-the-counter option shall be valued at the current market value. The fair value of a futures contract, swap orforward contract is the gain or loss with respect thereto that would be realized if, on that Valuation Date,the position in the futures contract, swap or forward contract, as the case may be, were to be closed outunless, in the case of a futures contract or forward contract, “daily limits” are in effect, in which case fairvalue shall be based on the current market value of the underlying interest. Margin paid or deposited inrespect of futures contracts and forward contracts are reflected as an account receivable and marginconsisting of assets other than cash is noted as held as margin.

4. In the case of any security or property for which no price quotations are available as provided above, the

value thereof will be determined from time to time by the Manager, where applicable, in accordance withthe principles described in paragraph 2(b) above, except that the Manager may use, for the purpose ofdetermining the sale price or the asked and bid price of such security or interest, any public quotations incommon use which may be available, or where such principles are not applicable, in such manner as may be approved of by the board of directors of the Manager.

5. The liabilities of an ETF will include:

all bills, notes and accounts payable of which the ETF is an obligor;

all brokerage expenses of the ETF;

all Management Fees of the ETF;

all contractual obligations of the ETF for the payment of money or property, including the amountof any unpaid distribution credited to Unitholders of the ETF on or before that Valuation Date;

all allowances of the ETF authorized or approved by the Manager for taxes (if any) orcontingencies; and

all other liabilities of the ETF of whatsoever kind and nature.

6. Each transaction of purchase or sale of a portfolio asset effected by an ETF shall be reflected by no laterthan the next time that the net asset value of the ETF and the net asset value per Unit of the ETF iscalculated.

In calculating the net asset value of an ETF, the ETF will generally value its investments based on the market valueof its investments at the time the net asset value of the ETF is calculated. If no market value is available for aninvestment of the ETF or if the Manager determines that such value is inappropriate in the circumstances (i.e. whenthe value of an investment of the ETF has been materially changed by effects occurring after the market closes), theManager will value such investments using methods that have generally been adopted by the marketplace. Fairvaluing the investments of an ETF may be appropriate if: (i) market quotations do not accurately reflect the fairvalue of an investment; (ii) an investment’s value has been materially affected by events occurring after the close ofthe exchange or market on which the investment is principally traded; (iii) a trading halt closes an exchange ormarket early; or (iv) other events result in an exchange or market delaying its normal close. The risk in fair valuing



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an investment of an ETF is that the value of the investment may be higher or lower than the price that the ETF may be able to realize if the investment had to be sold.

In determining the net asset value of an ETF, Units of the ETF subscribed for will be deemed to be outstanding andan asset of the ETF as of the time a subscription for such Units is received by and accepted by the Manager. Units ofan ETF that are being redeemed will only be deemed to be outstanding until (and not after) the close of business onthe day on which such Units of the ETF are redeemed and the redemption proceeds thereafter, until paid, will be aliability of the ETF.

For the purposes of financial statement reporting, an ETF is required to calculate net asset value in accordance withCanadian GAAP. On April 1, 2005, the CICA issued Section 3855, Financial Instruments – Recognition andMeasurement (“Section 3855”) of the CICA Handbook – Accounting, which establishes standards for the fairvaluation of investments as well as the accounting treatment of transaction costs. The adoption of Section 3855results in the use of different valuation techniques for certain investments.

The Securities Regulatory Authorities had previously granted relief to investment funds from the requirement tocomply with Section 3855, for the purposes of calculating and reporting of net asset value used for investortransactions. Effective September 8, 2008, amendments to National Instrument 81-106 - Investment Fund

Continuous Disclosure came into force to address the implications of Section 3855. The amendments permitinvestment funds to have two different net asset values: (i) one for financial statements, which will be prepared inaccordance with Canadian GAAP including Section 3855 (referred to as “net assets”); and (ii) another for all other purposes, including unit pricing for investor transactions (referred to as “net asset value”).

In accordance with the relief granted by the Securities Regulatory Authorities, disclosure of differences between netassets and net asset value of an investment fund is required for financial reporting purposes. For investments thatare traded in an active market where quoted prices are readily and regularly available, Section 3855 requires bid prices (for investments held) and ask prices (for investments sold) to be used in the fair valuation of investments,rather than the use of closing sale prices currently used for the purpose of determining net asset value used forinvestor transactions. For investments that are not traded in an active market, Section 3855 requires the use ofspecific valuation techniques rather than the use of valuation techniques by virtue of general practice in theinvestment funds industry to determine fair value.

Reporting of Net Asset Value

Persons or companies that wish to be provided with the most recent net asset value per Unit of an ETF may call theManager at 416-933-5745 or at 1-866-641-5739, or check the Manager’s website at www.HorizonsETFs.com. Themost recent net asset value per Unit of an ETF will be made available as of each Valuation Date.

ATTRIBUTES OF THE SECURITIES

Description of the Securities Distributed

Each ETF is authorized to issue an unlimited number of redeemable, transferable Units designated as Class E Unitsand Advisor Class Units pursuant to this prospectus, each of which represents an equal, undivided interest in the netassets of the ETF.

On December 16, 2004, the Trust Beneficiaries’ Liability Act, 2004 (Ontario) came into force. This statute providesthat holders of units of a trust are not, as beneficiaries, liable for any default, obligation or liability of the trust if,when the default occurs or the liability arises: (i) the trust is a reporting issuer under the Securities Act (Ontario); and(ii) the trust is governed by the laws of Ontario. Each ETF is or will be a reporting issuer under the Securities Act (Ontario) prior to the initial issuance of Units on the TSX and each ETF is governed by the laws of Ontario by virtueof the provisions of the Trust Declaration.

Each Unit of an ETF entitles the owner to one vote at meetings of Unitholders of the ETF or of that class of Units.Each Unit of an ETF is entitled to participate equally with all other Units of the ETF of the same class with respect



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to all payments made to Unitholders of the ETF, other than Management Fee Distributions, whether by way ofincome or capital distributions and, on liquidation, to participate equally in the net assets of the ETF remaining aftersatisfaction of any outstanding liabilities that are attributable to Units of that class of the ETF. All Units will be fully paid, when issued, in accordance with the terms of the Trust Declaration. Unitholders of an ETF are entitled torequire the ETF to redeem their Units of the ETF as outlined under the heading “Exchange and Redemption ofUnits” at page 34.

Exchange of Units for Baskets of Securities

Unitholders may exchange the applicable PNU (or a whole multiple thereof) of an ETF on any Trading Day for,subject to the Manager’s discretion, Baskets of Securities and/or cash, subject to the requirement that a minimumPNU be exchanged. See “Exchange and Redemption of Units” at page 34.

Redemption of PNU(s) for Cash

Unitholders may redeem the applicable PNU (or a whole multiple thereof) of an ETF on any Trading Day for cash,subject to the requirement that a minimum PNU be redeemed. See “Exchange and Redemption of Units” at page 34.

Redemption of Units for Cash pursuant to a Systematic Withdrawal Plan

Unitholders of an ETF who are participants in the Reinvestment Plan may redeem Units of the ETF for cash at aredemption price equal to the net asset value of the ETF if the redemption is made pursuant to a systematicwithdrawal plan. See “Redemption of Units for Cash” below, and “Systematic Withdrawal Plan” at page 31.

Redemptions of Units for Cash

On any Trading Day, Unitholders may redeem Units for cash at a redemption price per Unit equal to 95% of theclosing price for the Units on the TSX on the effective day of the redemption. See “Exchange and Redemption ofUnits” at page 34.

Conversion of Units

Unitholders may convert Advisor Class Units for Class E Units of the same ETF or may convert Class E Units forAdvisor Class Units of the same ETF, in either case on a monthly basis. See “Exchange and Redemption of Units -Conversion of Units” at page 35.

Modification of Terms

Any amendment to the Trust Declaration that creates a new class of Units of an ETF will not require notice toexisting Unitholders of the ETF unless such amendment in some way affects the existing Unitholders’ rights or thevalue of their investment. An amendment such as the re-designation of a class of an ETF, or the termination of aclass of the ETF, which has an effect on a Unitholder’s holdings will only become effective after 30 days’ notice toUnitholders of the applicable classes of the ETF.

All other rights attached to the Units of an ETF may only be modified, amended or varied in accordance with theterms of the Trust Declaration. See “Unitholder Matters – Amendments to the Trust Declaration” at page 58.

Voting Rights in the Portfolio Securities

Holders of Units will not have any voting rights in respect of the securities in an ETF’s portfolio.



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UNITHOLDER MATTERS

Meetings of Unitholders

A meeting of Unitholders of an ETF of a class of an ETF may be convened by the Manager by a written requisitionspecifying the purpose of the meeting and must be convened if requisitioned by Unitholders holding not less than

25% of the Units of the ETF or the applicable class, as applicable, then outstanding by a written requisitionspecifying the purpose of the meeting.

Not less than 21 days’ and not more than 50 days’ notice will be given of any meeting of Unitholders of an ETF or aclass of an ETF, as applicable. The quorum at any such meeting is at least two Unitholders of the ETF or the class,as applicable, present in person or by proxy except as may otherwise be required by Canadian securities legislation.If no quorum is present at such meeting when called, the meeting will be terminated and otherwise may beadjourned for not less than 48 hours. At the adjourned meeting the Unitholders of the ETF or the class, asapplicable, then present in person or represented by proxy will form the necessary quorum. At any meeting ofUnitholders, each Unitholder will be entitled to one vote for each whole unit registered in the Unitholder’s name.

The ETFs do not intend to hold annual meetings of Unitholders.

Matters Requiring Unitholder Approval

NI 81-102 requires a meeting of Unitholders of an ETF to be called to approve certain changes as follows:

(i) the basis of the calculation of a fee or expense that is charged to the ETF or its Unitholders is changed in away that could result in an increase in charges to the ETF or to its Unitholders, except where:

(A) the ETF is at arm’s length with the person or company charging the fee; and

(B) the Unitholders have received at least 60 days’ notice before the effective date of the change;

(ii) a fee or expense, to be charged to an ETF or directly to its Unitholders by the ETF or the Manager inconnection with the holding of Units of the ETF that could result in an increase in charges to the ETF or itsUnitholders, is introduced;

(iii) the Manager is changed, unless the new manager of the ETF is an affiliate of the Manager;

(iv) the fundamental investment objective of the ETF is changed;

(v) the ETF decreases the frequency of the calculation of its net asset value per Unit;

(vi) the ETF undertakes a reorganization with, or transfers its assets to, another mutual fund, if the ETF ceasesto continue after the reorganization or transfer of assets and the transaction results in the Unitholders of theETF becoming securityholders in the other mutual fund, unless:

(A) the IRC of the ETF has approved the change in accordance with NI 81-107;

(B) the ETF is being reorganized with, or its assets are being transferred to, another mutual fund towhich NI 81-102 and NI 81-107 apply, and that is managed by the Manager, or an affiliate of theManager;

(C) the Unitholders have received at least 60 days’ notice before the effective date of the change; and

(D) the transaction complies with certain other requirements of applicable securities legislation;



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(vii) the ETF undertakes a reorganization with, or acquires assets from, another mutual fund, if the ETFcontinues after the reorganization or acquisition of assets, the transaction results in the securityholders ofthe other mutual fund becoming Unitholders, and the transaction would be a material change to the ETF; or

(viii) any matter which is required by the constitutive documents of the ETF; by the laws applicable to the ETFor by any agreement to be submitted to a vote of the Unitholders.

In addition, the auditors of an ETF may not be changed unless:

(i) the IRC of the ETF has approved the change; and

(ii) Unitholders have received at least 60 days’ notice before the effective date of the change.

Approval of Unitholders will be deemed to have been given if expressed by resolution passed at a meeting ofUnitholders, duly called on at least 21 days’ notice and held for the purpose of considering the same, by at least amajority of the votes cast.

Amendments to the Trust Declaration

If a Unitholder meeting is required to amend a provision of the Trust Declaration, no change proposed at a meetingof Unitholders of an ETF shall take effect until the Manager has obtained the prior approval of not less than amajority of the votes cast at a meeting of Unitholders of the ETF or, if separate class meetings are required, atmeetings of each class of Unitholders of the ETF.

Subject to any longer notice requirements imposed under securities legislation, the Trustee is entitled to amend theTrust Declaration by giving not less than 30 days’ notice to Unitholders of each ETF affected by the proposedamendment in circumstances where:

(a) the securities legislation requires that written notice be given to Unitholders of that ETF before the changetakes effect; or

(b) the change would not be prohibited by the securities legislation; and

(c) the Trustee reasonably believes that the proposed amendment has the potential to adversely impact thefinancial interests or rights of the Unitholders of that ETF, so that it is equitable to give Unitholders of thatETF advance notice of the proposed change.

All Unitholders of an ETF shall be bound by an amendment affecting the ETF from the effective date of theamendment.

The Trustee may amend the Trust Declaration, without the approval of, or prior notice to, any Unitholders, if theTrustee reasonably believes that the proposed amendment does not have the potential to adversely impact thefinancial interests or rights of Unitholders of the ETF or that the proposed amendment is necessary:

(a) to ensure compliance with applicable laws, regulations or policies of any governmental authority having jurisdiction over the ETF or the distribution of its Units;

(b) to remove any conflicts or other inconsistencies which may exist between any terms of the TrustDeclaration and any provisions of any applicable laws, regulations or policies affecting the ETF, theTrustee or its agents;

(c) to make any change or correction in the Trust Declaration which is a typographical correction or is requiredto cure or correct any ambiguity or defective or inconsistent provision, clerical omission or error containedtherein;



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(d) to facilitate the administration of the ETF as a mutual trust or make amendments or adjustments in responseto any existing or proposed amendments to the Tax Act or its administration which might otherwiseadversely affect the tax status of the ETF or its Unitholders; or

(e) for the purposes of protecting the Unitholders of the ETF.

Reporting to Unitholders

Each ETF will furnish to its Unitholders such financial statements (including interim unaudited and annual auditedfinancial statements) and other reports as are from time to time required by applicable law to be furnished by theManager, including prescribed forms in respect of distributions from an ETF needed for the completion ofUnitholders’ tax returns under the Tax Act and equivalent provincial or territorial legislation.

The net asset value per Unit of each ETF will be determined by the Manager on each Valuation Date and willusually be published daily in the financial press.

Non-Resident Unitholders

At no time may: (i) non-residents of Canada; (ii) partnerships that are not Canadian partnerships; or (iii) acombination of non-residents of Canada and such partnerships (all as defined in the Tax Act), be the beneficialowners of a majority of the Units of an ETF (on either a number of Units or fair market value basis) and theManager shall inform the registrar and transfer agent of the ETF of this restriction. The Manager may requiredeclarations as to the jurisdictions in which a beneficial owner of Units is resident and, if a partnership, its status as aCanadian partnership. If the Manager becomes aware, as a result of requiring such declarations as to beneficialownership or otherwise, that the beneficial owners of 40% of the Units then outstanding (on either a number ofUnits or fair market value basis) are, or may be, non-residents and/or partnerships that are not Canadian partnerships, or that such a situation is imminent, the Manager may make a public announcement thereof. If theManager determines that more than 40% of the Units (on either a number of Units or fair market value basis) are beneficially held by non-residents and/or partnerships that are not Canadian partnerships, the Manager may send anotice to such non-residents and/or partnerships, chosen in inverse order to the order of acquisition or in suchmanner as the Manager may consider equitable and practicable, requiring them to sell their Units or a portion thereofwithin a specified period of not less than 30 days. If the Unitholders receiving such notice have not sold thespecified number of Units or provided the Manager with satisfactory evidence that they are not non-residents or

partnerships other than Canadian partnerships within such period, the Manager may, on behalf of such Unitholders,sell such Units and, in the interim, shall suspend the voting and distribution rights attached to such Units. Uponsuch sale, the affected holders shall cease to be beneficial holders of Units and their rights shall be limited toreceiving the net proceeds of sale of such Units.

Notwithstanding the foregoing, the Manager may determine not to take any of the actions described above if theManager has been advised by legal counsel that the failure to take any of such actions would not adversely impactthe status of an ETF as a mutual fund trust for purposes of the Tax Act or, alternatively, may take such other actionor actions as may be necessary to maintain the status of the ETF as a mutual fund trust for purposes of the Tax Act.

TERMINATION OF THE ETFs

Subject to complying with applicable securities law, the Manager may terminate an ETF or a class of an ETF at its

discretion. In accordance with the terms of the Trust Declaration and applicable securities law, Unitholders of anETF will be provided 60 days’ advance written notice of the termination.

If an ETF or a class of an ETF is terminated, the Trustee is empowered to take all steps necessary to effect thetermination. Prior to terminating an ETF or a class, the Trustee may discharge all of the liabilities of the ETF or theclass, as applicable, and distribute the net assets of the ETF or the class to the Unitholders.

Upon termination of an ETF or a class of an ETF, each Unitholder of the ETF or the class, as applicable, shall beentitled to receive, at the Valuation Time on the termination date, out of the assets of the ETF or the class: (i)



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payment for that Unitholder’s Units at the net asset value per Unit for that class of Units of the ETF determined atthe Valuation Time on the termination date; plus (ii) where applicable, any net income and net realized capital gainsthat are owing to, or otherwise attributable to, such Unitholder’s Units that have not otherwise been paid to suchUnitholder; less (iii) any applicable redemption charges and any taxes that are required to be deducted. Paymentshall be made by cheque or other means of payment payable to such Unitholder and drawn on the ETF’s bankersand may be mailed by ordinary post to such Unitholder’s last address appearing in the registers of Unitholders ofthat ETF or may be delivered by such other means of delivery acceptable to both the Manager and such Unitholder.

Procedure on Termination

The Trustee shall be entitled to retain out of any assets of an ETF, at the date of termination of the ETF, full provision for all costs, charges, expenses, claims and demands incurred or believed by the Trustee to be due or to become due in connection with, or arising out of, the termination of the ETF and the distribution of its assets to theUnitholders of the ETF. Out of the moneys so retained, the Trustee is entitled to be indemnified and saved harmlessagainst all costs, charges, expenses, claims and demands.

PLAN OF DISTRIBUTION

Units of each ETF are being offered for sale on a continuous basis by this prospectus and there is no minimumnumber of Units of an ETF that may be issued. The Units of each ETF are offered for sale at a price equal to the netasset value of such Units next determined following the receipt of a subscription order. The net asset value per Unitof Horizons HUS.U is only calculated in U.S. dollars and Units of Horizons HUS.U only trades on the TSX in U.S.dollars.

BROKERAGE ARRANGEMENTS

Units of the ETFs are listed and trade on the TSX.

Subject to the prior written approval of the Manager, the Investment Manager is authorized to establish, maintain,change and close brokerage accounts on behalf of the ETFs. The Investment Manager intends to use a number ofclearing brokers to transact trades in futures contracts on behalf of the ETFs. Once such brokerage accounts areestablished, the Investment Manager is authorized to negotiate commissions and fees to be paid on such brokeragetransactions, subject to a continuing obligation to seek and obtain the best price, execution and overall terms.

RELATIONSHIP BETWEEN THE ETFs AND DEALERS

The Manager, on behalf of an ETF, may enter into various Dealer Agreements with registered dealers (that may ormay not be Designated Brokers) pursuant to which the Dealers may subscribe for Units of the ETF as describedunder “Purchases of Units”. Such registered dealers may be related to the Manager. See “Organization andManagement Details of the ETFs - Conflicts of Interest” at page 50.

A Dealer Agreement may be terminated by the registered dealer at any time by notice to AlphaPro, provided that,except in certain conditions, no such termination will be permitted after the registered dealer has subscribed forUnits of the ETF and such subscription has been accepted by AlphaPro.

An affiliate of NBF holds an indirect minority interest in the Manager. NBF acts or may act as a Designated Broker,

a Dealer and/or a registered trader (market maker). Accordingly, the ETFs may be considered to be connectedissuers of NBF under applicable securities laws. NBF’s potential role as a Dealer of an ETF will not be as anunderwriter of the ETF in connection with the distribution of Units of the ETF under this prospectus. NBF has not been involved in the preparation of this prospectus nor has it performed any review of the contents of this prospectus. See “Organization and Management Details of the ETF - Conflicts of Interest” at page 50.



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PRINCIPAL HOLDERS OF UNITS OF THE ETFs

To the knowledge of the Manager, as of April 30, 2013, there are no holders of more than 10% of any class of Unitsof any of the ETFs, other than NBF, who beneficially hold (a) 509,007, or 45.2%, of the Class E Units of HorizonsHUT; (b) 41,542, or 41.5%, of the Advisor Class Units of Horizons HUT; (c) 372,324, or 37.2%, of the Class EUnits of Horizons HUS.U; or (d) 44,265, or 44.3%, of the Advisor Class Units of Horizons HUS.U.

PROXY VOTING DISCLOSURE FOR PORTFOLIO UNITS HELD

AlphaPro has established the Proxy Voting Policy for securities held by the ETFs to which voting rights areattached. AlphaPro is responsible for all securities voting in respect of securities held by the ETFs and exercisingresponsibility with a view to the best economic interests of the ETFs and their Unitholders. The Proxy VotingPolicy is intended to provide for the exercise of such voting rights in accordance with the best interests of the ETFs.

The Proxy Voting Policy sets out the guidelines and procedures that AlphaPro will follow to determine whether andhow to vote on any matter for which the ETFs receive proxy materials. Issuers’ proxies most frequently contain proposals to elect corporate directors, to appoint external auditors and set their compensation, to adopt or amendmanagement compensation plans, and to amend the capitalization of the company.

Pursuant to the Proxy Voting Policy, AlphaPro will generally cause an ETF to vote on these matters as follows:

(a) Board Of Directors – The Manager supports establishing a majority of independent directors andindependent committee chairs. Boards are required to act in the best interests of all shareholders. This can be achieved by ensuring that the majority of directors are independent. The Manager will not normally voteagainst a slate of directors because they are not independent.

(b) Contested Director Elections – In the case of contested board elections, the nominees’ qualifications and

the performance of the incumbent board will be evaluated, as well as the rationale behind the dissidents’campaign, to determine the outcome that will maximize shareholder value.

(c) Classified Boards – Proposals to declassify existing boards (whether proposed by management orshareholders) will generally be supported, and efforts by companies to adopt classified board structures, inwhich only part of the board is elected each year, will be resisted.

(d)

Director/Officer Indemnification – Proposals to indemnify directors and officers will generally besupported to ensure the companies can recruit the most qualified individuals. Individuals may be reluctantto serve as a director or officer if they were to be personally liable for all lawsuits and legal costs.

(e) Director Ownership – Proposals that will require independent directors to hold a minimum amount ofcompany stock as individuals will generally be opposed. Such a requirement raises questions aboutdirectors’ independence, and qualified candidates may be reluctant to accept directorships in the face ofsuch a requirement.

(f) Director Qualifications – The Manager supports establishing minimum standards for directors anddisclosing the directors’ qualifications to shareholders. In addition, the Manager supports boards thatconsist of experienced individuals with the appropriate business and professional credentials. Electeddirectors should have general business acumen and company specific knowledge, and should makeinformed and independent judgments.

(g)

Independent Advisors – The Manager supports empowering boards, board committees and individualdirectors to retain (at the subject company’s expense) outside legal counsel and other advisors to assist themwith their responsibilities.

(h) Separation of Chair and Chief Executive Officer – The Manager supports, where possible, separating

the chair and chief executive officer roles. The board chair should be an independent executive director.

(i) Approval of Independent Auditors – The relationship between a company and its auditors should belimited primarily to the audit, although it may include certain closely related activities that do not, in theaggregate, raise any appearance of impaired independence. Management’s recommendation for the



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ratification of the auditors, except in instances where audit and audit-related fees make up less than 50% ofthe total fees paid by the company to the audit firm, will generally be supported.

(j) Executive Compensation – The Manager supports establishing an independent compensation committeeto ensure that executive compensation is competitive and fair.

(k) Stock-Based Compensation Plans – An independent compensation committee should have significantlatitude to deliver varied compensation to motivate the company’s employees. However, all compensation proposals will be evaluated in the context of several factors (a company’s industry, market capitalization,competitors for talent, etc.) to determine whether a particular plan or proposal balances the perspectives ofemployees and the company’s other shareholders.

(l) Bonus Plans – Bonus plans, which must be periodically submitted for shareholder approval, should haveclearly defined performance criteria and maximum awards expressed in dollars. Bonus plans with awardsthat are excessive in both absolute terms and relative to a comparative group generally will not besupported.

(m) Employee Stock Purchase Plans – The use of employee stock purchase plans to increase company stockownership by employees will generally be supported provided that shares purchased under the plan areacquired for no less than 85% of their market value and that shares reserved under the plan comprise lessthan 5% of the outstanding shares.

(n)

Executive Severance Agreements – While executives’ incentives for continued employment should bemore significant than severance benefits, there are instances, particularly in the event of a change in control,in which severance arrangements may be appropriate. The Manager will generally, without submission toshareholders, cause an ETF to vote in favour of approving severance benefits triggered by a change incontrol that do not exceed three times an executive’s salary and bonus.

(o) Shareholder Rights Plans – In evaluating the approval of proposed shareholder rights plans, the followingfactors will be considered: the length of the plan; whether the plan requires shareholder approval forrenewal; whether the plan incorporates review by a committee of independent directors at least every threeyears; whether the plan includes permitted bid/qualified offer features that mandate a shareholder vote incertain situations; whether the ownership trigger is reasonable; and the level of independence of the boardthat is proposing such plan.

(p) Crown Jewel Defence – The sale of assets to “friendly” companies in an effort to frustrate a takeover will

generally be opposed as this action could impair shareholder value.(q) Cumulative Voting – Cumulative voting will generally be opposed on the basis that it allows shareholders

a voice in director elections that is disproportionate to their economic investment in the corporation.

(r) Supermajority Vote Requirements – Shareholders’ ability to approve or reject matters presented for a

vote based on a simple majority will be supported. Accordingly, proposals to remove supermajorityrequirements will be supported, and proposals to impose them will be opposed.

(s) Right to Call Meetings and Act by Written Consent – Shareholders’ rights to call special meetings of the board (for good cause and with ample representation) and to act by written consent will generally besupported. Proposals to grant these rights to shareholders will be supported, and proposals to abridge theserights will be opposed.

(t) Confidential Voting – The integrity of the voting process is enhanced substantially when shareholders(both institutions and individuals) can vote without fear of coercion or retribution based on their votes. Assuch, proposals to provide confidential voting will be supported.

(u) Dual Classes of Stock – Dual-class capitalization structures that provide disparate voting rights to differentgroups of shareholders with similar economic investments are objectionable. As such, the creation ofseparate classes with different voting rights will be opposed, and the dissolution of such classes will besupported.

(v) Corporate and Social Policy Issues – Proposals in this category, initiated primarily by shareholders,typically request that the corporation disclose or amend certain business practices. These are “ordinary business matters” that are primarily the responsibility of management and should be evaluated and



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approved solely by the corporation’s board of directors. The ETFs will typically abstain from voting onthese proposals absent a compelling economic impact on shareholder value (e.g., proposals to requireexpensing of stock options).

Increase in Authorized Shares – The Manager supports only issuing additional common shares for good businessreasons. Other issues, including those business issues specific to the issuer or those raised by shareholders of theissuer, are addressed on a case-by-case basis with a focus on the potential impact of the vote on shareholder value.

The ETFs may limit their voting on foreign holdings in instances where the issues presented are unlikely to have amaterial impact on shareholder value, since the costs of voting (e.g. custodian fees, vote agency fees) in foreignmarkets may be substantially higher than for Canadian holdings.

If the potential for conflict of interest arises in connection with proxy voting and if deemed advisable to maintainimpartiality, the Proxy Voting Policy provides that AlphaPro may choose to seek and follow the recommendation ofan independent proxy search and voting service.

The Proxy Voting Policy is available on request, at no cost, by calling the Manager toll-free at 1-866-641-5739 oremailing the Manager at [email protected].

An ETF’s proxy voting record for the annual period from July 1 to June 30 will be available free of charge to anyinvestor of the ETF upon request at any time after August 31 following the end of that annual period. An ETF’s proxy voting record will also be available on our Internet site at www.HorizonsETFs.com.

MATERIAL CONTRACTS

The only contracts material to the ETF are the:

(a) Trust Declaration. For additional disclosure related to the Trust Declaration, including relevanttermination provisions and other key terms of the agreement, see “Organization and Management Details ofthe ETF – The Trustee” on page 51, “Attributes of Securities – Modification of Terms” on page 56, and“Unitholder Matters – Amendments to the Trust Declaration” on page 58;

(b) Investment Management Agreement. For additional disclosure related to the Investment Management

Agreement, including relevant termination provisions and other key terms of the agreement, see“Organization and Management Details of the ETF – Details of the Investment Management Agreement”on page 46;

(d) Custodian Agreement. For additional disclosure related to the Custodian Agreement, including relevanttermination provisions and other key terms of the agreement, see “Organization and Management Details ofthe ETF – Custodian” on page 52;

(e) Designated Broker Agreement. For additional disclosure related to the Designated Broker Agreement,see “Organization and Management Details of the ETF – Designated Brokers” on page 49; and

(f) Sub-Advisory Agreement, For additional disclosure related to the Sub-Advisory Agreement, includingrelevant termination provisions and other key terms of the agreement, see “Organization and Management

Details of the ETF – Details of the Sub-Advisory Agreement” on page 49.

Copies of these agreements may be examined at the head office of the Manager, 26 Wellington Street East, Suite700, Toronto, Ontario, M5E 1S2, during normal business hours.

LEGAL AND ADMINISTRATIVE PROCEEDINGS

The ETFs are not involved in any legal proceedings, nor is the Manager aware of existing or pending legal orarbitration proceedings involving any of the ETFs.



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EXPERTS

Fasken Martineau DuMoulin LLP, legal counsel to the ETFs, has provided a legal opinion on the principal Canadianfederal income tax considerations that apply to an investment in Units of an ETF by an individual resident inCanada. See “Income Tax Considerations” on page 38.

KPMG LLP, the auditors of the ETFs, have consented to the use of their reports each dated March 13, 2013 to theUnitholders of the ETFs. KPMG LLP has confirmed that they are independent with respect to the ETFs within themeaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario.

EXEMPTIONS AND APPROVALS

The ETFs are entitled to rely on exemptive relief from the Securities Regulatory Authorities to:

(a) permit a Unitholder to acquire more than 20% of the Units through purchases on the TSX without regard tothe takeover bid requirements of applicable Canadian securities legislation provided the Unitholder, andany person acting jointly or in concert with such Unitholder, undertakes to the Manager not to vote morethan 20% of the Units at any meeting of Unitholders. See “Purchases of Units – Buying and Selling Unitsof an ETF” at page 33;

(b)

permit the redemption of less than a PNU at a price equal to 95% of the closing price for the Units on theTSX on the effective date of redemption;

(c)

relieve the ETFs from the requirement that a prospectus contain a certificate of the underwriters;

(d) relieve the ETFs from the dealer registration requirement provided that the Manager complies with Part 15of NI 81-102;

(a)

permit the ETF to lend up to 100% of its investment portfolio to qualified borrowers; and

(e) permit the ETFs to lend securities with a lending agent that is not the Custodian.

OTHER MATERIAL FACTS

Management of the ETF

AlphaPro may, at any time and without seeking Unitholder approval, assign the Trust Declaration to an affiliate.

Index Information

1. S&P/TSX 60™ Index

The S&P/TSX 60™ Index is a measure of large-cap Canadian stock market performance. The index sharesunderlying the S&P/TSX 60™ Index represent sixty of the largest (by market capitalization) and most liquid stockslisted for trading on the TSX. The S&P/TSX 60™ Index is a market capitalization weighted index.

The Committee is responsible for selecting and determining the index shares, setting policy with respect to thecomposition, calculation, maintenance and administration of the index generally and for making adjustments to suchindex. The Committee is composed of seven members, a majority of whom are employees of Standard & Poor’s, adivision of The McGraw-Hill Companies, Inc. and the remainder of whom are employees of the TSX. The ChiefEconomist of Standard & Poor’s is currently the Chair of the Committee. The Committee usually meets monthly, but may also meet more frequently as required.

“S&P/TSX 60” is a trademark of The McGraw-Hill Companies, Inc. and “TSX” is a trademark of the TorontoStock Exchange, which have each been licensed for use by the Manager.



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Disclaimer:

Horizons HUT is not sponsored, endorsed, sold or promoted by Standard & Poor’s and its affiliates (“ S&P”) or bythe TSX and its affiliates (the “TSE”). S&P and TSE make no representation, condition or warranty, express orimplied, to the owners of Horizons HUT or any member of the public regarding the advisability of investing insecurities generally or in Horizons HUT particularly or the ability of any index to track general stock market performance. S&P’s and TSE’s only relationship to the Manager is the licensing of certain trademarks and tradenames and of the index, which are determined, composed and calculated by S&P and/or the TSE without regard tothe Manager or Horizons HUT. S&P and the TSE have no obligation to take the needs of the Manager or the ownersof Horizons HUT into consideration in determining, composing or calculating any index. S&P and the TSE are notresponsible for and have not participated in the determination of the prices and amounts of Horizons HUT or thetiming of the issuance or sale of Horizons HUT or issued or in the determination or calculation of the equation bywhich Horizons HUT are to be converted into cash. S&P and TSE have no obligation or liability in connection withthe administration, marketing or trading of Horizons HUT.

S&P AND THE TSE DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF

THE S&P/TSX 60™ INDEX OR ANY DATA INCLUDED THEREIN AND S&P AND THE TSE SHALL

HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P AND

THE TSE MAKE NO WARRANTY OR CONDITION, EXPRESS OR IMPLIED, AS TO RESULTS TO BE

OBTAINED BY THE MANAGER, OWNERS OF THE ETF, OR ANY OTHER PERSON OR ENTITY

FROM THE USE OF THE S&P/TSX 60™ INDEX OR ANY DATA INCLUDED THEREIN. S&P AND THETSE MAKE NO EXPRESS OR IMPLIED WARRANTIES OR CONDITIONS, AND EXPRESSLY

DISCLAIM ALL WARRANTIES OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A

PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P/TSX 60™ INDEX OR ANY DATA

INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL

S&P OR THE TSE HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR

CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), RESULTING FROM THE USE OF THE

S&P/TSX 60™ INDEX OR ANY DATA INCLUDED THEREIN, EVEN IF NOTIFIED OF THE

POSSIBILITY OF SUCH DAMAGES.

2. S&P 500®

The S&P 500® includes 500 leading companies in leading industries of the U.S. economy. The market

capitalization values of the companies that constitute the S&P 500® range from $1.1 billion to $338.5 billion. TheS&P 500® is also the U.S. component of the S&P Global 1200.

Standard & Poor’s®, S&P®, S&P 500®, and Standard & Poor’s 500® are trademarks of S&P and have beenlicensed for use by AlphaPro Management Inc. Horizons HUS.U is not sponsored, endorsed, sold or promoted byS&P or its Affiliates, and S&P and its Affiliates make no representation, warranty or condition regarding theadvisability of buying, selling or holding units/shares in Horizons HUS.U.

Disclaimer:

HORIZONS HUS.U IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'SAND ITS AFFILIATES (IN THIS DISCLAIMER, "S&P"). S&P MAKES NO REPRESENTATION, CONDITIONOR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF HORIZONS HUS.U OR ANY MEMBER

OF THE PUBLIC REGARDING THE ADVISABILITY OF INVESTING IN SECURITIES GENERALLY OR INHORIZONS HUS.U PARTICULARLY OR THE ABILITY OF THE S&P 500 INDEX (IN THIS DISCLAIMER,THE “INDEX” TO TRACK THE PERFORMANCE OF CERTAIN FINANCIAL MARKETS AND/ORSECTIONS THEREOF AND/OR OF GROUPS OF ASSETS OR ASSET CLASSES. S&P'S ONLYRELATIONSHIP TO ALPHAPRO MANAGEMENT INC. IS THE LICENSING OF CERTAIN TRADEMARKSAND TRADE NAMES AND OF THE INDEX WHICH IS DETERMINED, COMPOSED AND CALCULATEDBY S&P WITHOUT REGARD TO ALPHAPRO MANAGEMENT INC. OR HORIZONS HUS.U. S&P HAS NOOBLIGATION TO TAKE THE NEEDS OF ALPHAPRO MANAGEMENT INC. OR THE OWNERS OFHORIZONS HUS.U INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THEINDEX. S&P IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE DETERMINATION OF



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THE PRICES AND AMOUNT OF HORIZONS HUS.U OR THE TIMING OF THE ISSUANCE OR SALE OFHORIZONS HUS.U OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICHHORIZONS HUS.U UNITS ARE TO BE CONVERTED INTO CASH. S&P HAS NO OBLIGATION ORLIABILITY IN CONNECTION WITH THE ADMINISTRATION, MARKETING, OR TRADING OF THE ETF.

NEITHER S&P, ITS AFFILIATES NOR THIRD PARTY LICENSORS, GUARANTEES THE ACCURACYAND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN AND S&P, ITSAFFILIATES AND THEIR THIRD PARTY LICENSORS, SHALL HAVE NO LIABILITY FOR ANY ERRORS,OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKE NO WARRANTY, CONDITION ORREPRESENTATION, EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED BY ALPHAPROMANAGEMENT INC., OWNERS OF HORIZONS HUS.U, OR ANY OTHER PERSON OR ENTITY FROMTHE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIEDWARRANTIES, REPRESENTATIONS OR CONDITIONS, AND EXPRESSLY DISCLAIM ALLWARRANTIES OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSEOR USE AND ANY OTHER EXPRESS OR IMPLIED WARRANTY OR CONDITION WITH RESPECT TOTHE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P, ITS AFFILIATES OR THEIR THIRD PARTY LICENSORS, HAVE ANY LIABILITYFOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOSTPROFITS) RESULTING FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

PURCHASERS’ STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION

Securities legislation in certain of the provinces and territories of Canada provides purchasers with the right towithdraw from an agreement to purchase mutual fund securities within two (2) business days after receipt of a prospectus and any amendment or within 48 hours after receipt of a confirmation of a purchase of such securities. Ifthe agreement is to purchase such securities under a contractual plan, the time period during which withdrawal may be made may be longer.

In several of the provinces and territories, securities legislation further provides a purchaser with remedies forrescission or, in some jurisdictions, damages if the prospectus and any amendment contains a misrepresentation or isnot delivered to the purchaser, but such remedies must be exercised by the purchaser within the time limits prescribed by the securities legislation of the investor’s province or territory of residence. The purchaser should

refer to the applicable provisions of the securities legislation of the province or territory for the particulars of theserights or should consult with a legal advisor.

DOCUMENTS INCORPORATED BY REFERENCE

Additional information about the ETFs is or will be available in the following documents:

(a) the most recently filed comparative annual financial statements of the ETFs, together with theaccompanying report of the auditors, when filed;

(b) any interim financial statements of the ETFs;

(c) the most recently filed annual management report of fund performance of the ETFs, when filed; and

(d) any interim management report of fund performance of the ETFs filed after that most recently filed annualmanagement report of fund performance of the ETFs.

These documents are incorporated by reference into this prospectus, which means that they legally form part of thisdocument just as if they were printed as part of this document. You can obtain a copy of these documents, at yourrequest, and at no cost, by calling toll-free: 1-866-641-5739 or by contacting your dealer. These documents areavailable on the ETFs’ Internet site at www.HorizonsETFs.com. These documents and other information about theETFs are also available on the Internet at www.sedar.com.



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In addition to the documents listed above, any documents of the type described above that are filed on behalf of theETFs after the date of this prospectus and before the termination of the distribution of the ETFs are deemed to beincorporated by reference into this prospectus.



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Horizons Universa Canadian Black Swan ETF

Horizons Universa US Black Swan ETF(the “ETFs”)

CERTIFICATE OF THE ETFs, MANAGER AND PROMOTER

Dated: May 2, 2013

This prospectus, together with the documents incorporated herein by reference, constitutes full, true and plaindisclosure of all material facts relating to the securities offered by this prospectus as required by the securitieslegislation of all of the provinces and territories of Canada.

ALPHAPRO MANAGEMENT INC.,

AS TRUSTEE, MANAGER AND PROMOTER OF THE ETFS

“Adam Felesky” “Robert Shea”

Adam FeleskyChief Executive Officer

Robert SheaChief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS

OF ALPHAPRO MANAGEMENT INC.

“Taeyong Lee” “Howard Atkinson”

Taeyong LeeDirector

Howard AtkinsonDirector

Universa Hedge Fund Prospectus

Documents

Transcript of Universa Hedge Fund Prospectus