Toronto-based Horizons ETFs Management (Canada) Inc. has launched Horizons Intl Developed Markets Equity Index ETF, which began trading on the Toronto Stock Exchange on Wednesday.

The ETF, which has a management fee of 0.20%, aims to provide indirect exposure to the MSCI EAFE index by tracking the performance of the Horizons EAFE futures roll index, net of expenses, Horizons says in a news release.

The Horizons EAFE futures roll index reflects the returns produced over time of notional investments that represent a long position in a series of futures contracts on the MSCI EAFE index.

The MSCI EAFE index was developed to measure the performance of large- and mid-cap securities among 21 developed markets outside of North America that include Australia, Continental Europe, Japan and the U.K.

The MSCI EAFE has 924 constituents and covers approximately 85% of the free-float-adjusted market capitalization in each country, Horizons says. The total free-float market capitalization of the MSCI EAFE index is US$14 trillion.

"International developed market equities exposure has been the No. 1 asset class for ETF inflows in 2017," says Steve Hawkins, president and co-CEO of Horizons ETFs, in a statement.

Horizons Intl Developed Markets Equity Index ETF employs Horizons ETFs total return index structure to duplicate the returns of the Horizons EAFE futures roll index. This structure was created to improve the after-tax performance benefits of the ETF, the firm says.

Horizons doesn't expect the ETF to pay any distributions. Rather, the value of any dividend or interest income is directly mirrored in the ETF's performance.

Horizons is taking this approach because it results in better tax efficiency for investors who hold the ETF in non-registered investment accounts, the firm says in a news release.