An anonymous director of Horizons ETFs Management reports

HORIZONS ETFS ANNOUNCES ESTIMATED 2014 ANNUAL CAPITAL GAINS DISTRIBUTIONS

Horizons ETFs Management (Canada) Inc. has estimated non-cash capital gains to be distributed to unitholders of certain of the exchange-traded funds managed by it and its affiliate AlphaPro Management Inc. for the 2014 tax year as indicated in the attached table. With respect to the Horizons BetaPro family of leveraged, inverse, inverse leveraged and volatility ETFs, as well as the Horizons benchmark ETFs, this is expected to be the eighth consecutive year with no capital-gain distributions. This includes the Horizons S&P/TSX 60 Index ETF and the Horizons S&P 500 ETF, which have both completed four full calendar years of operations since their inception without any capital-gain distributions to unitholders.

Please note that these are estimated amounts only. Circumstances may arise which could cause these estimates to change before the ETF's applicable tax year ends on Dec. 15, 2014, or Dec. 31, 2014.

Each of the ETFs is required to distribute any net income and capital gains that it has earned in the year. The final annual capital-gain distributions will not be paid in cash, but will be reinvested and reported as taxable distributions, and will be used to increase each unitholder's adjusted cost base for the respective ETF. These estimated amounts are for the annual capital-gain distributions and do not include any estimates of the regular monthly or quarterly cash distributions, as applicable, including those capital gains that may form part of the monthly and/or quarterly distributions.

Horizons ETFs expects to announce the final year-end income and capital-gain distribution amounts, as well as regular monthly or quarterly distribution amounts, on or about Dec. 18 and 19, 2014. The ex dividend date for these distributions is anticipated to be Dec. 29, 2014, for all unitholders of record on Dec. 31, 2014. In early 2015, the tax characteristics of all distributions for 2014 for the ETFs will be reported to brokers through CDS.

                               ESTIMATED CAPITAL-GAIN DISTRIBUTIONS

ETF name                                            Ticker  Estimated annual  Net asset value  Estimated capital
                                                    symbol  capital gain      per unit as of   gains as a %
                                                            per unit as of    Dec. 5, 2014     of NAV as of
                                                            Dec. 5, 2014                       Dec. 5, 2014

Horizons Active Cdn Dividend ETF                    HAL     --                $14.5495         0.00%
                                                    HAL.A   --                $14.5559         0.00%
Horizons Active S&P/TSX 60 Index
Covered Call ETF                                    HAX     $0.093            $10.0218         0.93%
                                                    HAX.A   $0.093            $10.0167         0.93%
Horizons Active Global Dividend ETF                 HAZ     $0.271            $16.9715         1.60%
                                                    HAZ.A   $0.266            $16.9877         1.57%
Horizons Auspice Broad Commodity Index ETF          HBR     --                $8.6125          0.00%
                                                    HBR.A   --                $8.4824          0.00%
Horizons Enhanced Income U.S. Equity (USD) ETF (1)  HEA.U   $0.900            $11.4612         7.85%
                                                    HEA     $0.900            $13.0978         7.85%
                                                    HEA.V   $0.891            $11.4645         7.78%
                                                    HEA.A   $0.891            $13.1016         7.78%
Horizons Enhanced Income Energy ETF                 HEE     --                $4.1744          0.00%
                                                    HEE.A   --                $4.2019          0.00%

(1) Distributions, if any, for Horizons Enhanced Income U.S. Equity (USD) ETF, are declared 
and paid in U.S. dollars, including those listed under the Canadian-dollar-traded tickers 
HEA and HEA.A. The approximate Canadian-dollar-equivalent distribution rate for HEA and 
HEA.A is $1.028 and 1.019 per unit, respectively. For unitholders who hold 
Canadian-dollar-traded HEA and HEA.A, distribution payments will typically be converted 
to Canadian dollars by the unitholder's account holder.

Reasons for the larger estimated capital-gain distribution for: HEA.U, HEA/HEA.V, HEA.A

Horizons Enhanced Income U.S. Equity realized capital gains consistently throughout the year largely as a result of the ETF's equity positions getting sold as part of the ETF's call option writing strategy. The S&P 500 has returned approximately 14 per cent year to date to the end of November on a total return basis. With historically low volatility driving much of the call writing during the year toward near-the-money options to generate premiums, the steady upward movement in the S&P 500 would frequently cause the ETF's equity positions to move through the written strike prices forcing the ETF to realize accumulated gains from the inception of the ETF.

We seek Safe Harbor.