Exchange-Traded Funds
An ETF is an investment fund that trades throughout the day on stock exchanges during
normal trading hours. ETFs combine the advantages of investing in index funds, including
diversification and low costs, coupled with the liquidity and flexibility of investing
in individual stocks. ETFs offer investors certain advantages over other investment
vehicles, including enhanced tax efficiency, intra-day liquidity and transparency.
ETFs are designed to closely track the holdings and performance of their designated
index, whose selection methodology can be either passive or strategic.
Claymore ETFs: Access to Innovation
Innovative
Claymore ETFs provide access to innovative indexes distinctly designed as investment
solutions. Unlike ETFs that track traditional indexes representing market participation,
the indexes Claymore ETFs track seek to best capture the investment potential of
unique strategies.
Strategy Driven
Claymore believes that a strategy-driven, quantitative process provides a disciplined
investment approach that may offer the potential for positive performance over market
cycles.
Best-in-Class Index Providers
The indexes Claymore ETFs seek to track are designed by best-in-class index providers
with defined investment philosophies. These index providers have backgrounds in
areas including financial analysis, academic research and investment research and
management.
Who Should Invest in ETFs?
ETFs are designed for investors seeking:
- a relatively low-cost investment
- to know what they own
- the flexibility of intraday liquidity
- a potentially tax-efficient investment solution
How to Purchase Claymore ETFs
Claymore ETFs are listed on the AMEX or NYSE Arca, depending on the ETF listing, the
same way as shares of a publicly-traded company. Claymore ETFs can be purchased through most
brokerage accounts. They can be bought and sold throughout the day on the AMEX or NYSE Arca,
depending on the ETF listing, during normal trading hours.
Claymore ETFs issue and redeem shares at NAV only in large blocks of varying amounts of shares
(each block of shares is called a “Creation Unit”), or multiples thereof. Only broker-dealers
or large institutional investors with creation and redemption agreements, called Authorized Participants
(“APs”), can purchase or redeem these Creation Units. Creation Unit size varies depending
on the ETF. Please see the individual ETF prospectus for more information.
The investors buying or selling ETF shares on the secondary market may incur brokerage costs and other
transactional fees. Shares of ETFs may fluctuate in price due to daily changes in trading volume. At times,
shares may not have a high volume of trading. Except when aggregated in Creation Units, Shares are not
redeemable securities of the Funds.
Claymore ETFs
Tax-Efficient Operation
ETFs are designed with tax-efficiency in mind, meaning they may make substantially
lower capital gains distributions over time, however there is no guarantee this
will occur.
Cost Efficiency
ETFs have relatively low annual expense ratios compared to other investment products.
This is because ETFs are index-based and generally do not experience the amount of portfolio
turnover and trading costs that other products may have.
Transparency
ETFs post their holdings on a daily basis, thereby enabling investors to know what
they own and to make more informed investment decisions.
Flexibility
Similar to stock trading, ETFs can be purchased on margin, sold short and can have
stop and limit orders placed on them.
Intraday Liquidity
ETFs can be bought and sold throughout the day on a stock exchange during normal
trading hours.
Diversification
ETFs represent an investment in an index or basket of securities, thus providing
a convenient approach to achieve diversification. This level of diversification
would be time consuming (and expensive) to replicate using individual stocks and
bonds.