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Rating:Claymore Offers Up Luxury With a Low Expense Ratio Not Rated 3.0 Email Routing List Email & Route  Print Print
Monday, July 30, 2007

Claymore Offers Up Luxury With a Low Expense Ratio

by: Erin Kello

Claymore Securities launched a luxurious new ETF offering on the NYSE today. The Claymore/Robb Report Global Luxury Index ETF will track companies whose primary business is the provision of global luxury goods and services. These may include retailers, manufacturers (which may include automobiles, boats, aircraft, and consumer electronics), travel and leisure companies.

Claymore Securities, Inc. today launched the Claymore/Robb Report Global Luxury Index ETF (NYSE:ROB) on the New York Stock Exchange. The new ETF tracks an index that is designed to capture the opportunity created by companies whose primary business is the provision of global luxury goods and services.

According to the World Wealth Report 2007 issued by CapGemini and Merrill Lynch, the number of millionaires in the world has doubled in the past 10 years. According to research conducted by CurtCo Robb Media, LLC, analysts anticipate that because of the continued growth and considerable disposable income of these HNWIs, luxury goods and services companies will continue to enjoy greater pricing power, creating margin-expansion opportunities and fueling further profit growth. According to Telsey Advisory Group, a leading independent equity research and consulting firm, the $150 billion global luxury goods market is projected to grow 6-7% annually over the next five years.

“The Robb Report has defined luxury for over 30 years,” says Christian Magoon, Senior Managing Director, and head of the ETF Group for Claymore Securities, Inc. “We believe this Index represents some of the finest luxury brands, goods and services in the world and with the introduction of the Claymore/Robb Report Global Luxury Index ETF, investors can now access the global luxury market in an efficient and transparent ETF. Our partnership with CurtCo Robb Media, LLC continues the tradition of access to innovation that we feel distinguishes Claymore ETFs from other ETF providers.”

“The emergence of luxury goods and services is an important and growing sector in the global economy,” said Bill Curtis, Chief Executive Officer of CurtCo Robb Media, LLC, which owns Robb Report and a stable of other leading magazine brands catering to high-net worth consumers. “Our index is the first global index of its kind and we see it as a natural brand extension, one that underscores Robb Report as the preeminent brand in the global luxury goods and services marketplace and a critical link between the companies that sell such products and the consumers who buy them.”

The Claymore/Robb Report Global Luxury Index ETF (NYSE:ROB) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Robb Report Global Luxury Index (the “Index”). The Index is comprised of no fewer than 20 and up to 100 equity securities traded on major global developed market exchanges, as well as American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) of companies whose primary business is the provision of global luxury goods and services. These may include retailers, manufacturers (which may include automobiles, boats, aircraft, and consumer electronics), travel and leisure firms, and investment and other professional services firms. The designation of such firms as “luxury” is determined by the publisher of the Robb Report magazine, CurtCo Robb Media, LLC (the “Robb Report” or the “Index Provider”). All stocks in the Robb Report Global Luxury Index are selected from the global investable universe of companies whose primary business is the provision of global luxury global goods and services, as determined by the Index Provider. The index constituents are weighted using a modified market cap weighting methodology, and the index rebalances annually.

About Claymore Securities

Claymore Securities, Inc. is a privately-held financial services company offering unique investment solutions for financial advisors and their valued clients. As of June 30, 2007, Claymore entities have provided supervision, management, servicing or distribution on more than $17 billion in assets through closed-end funds, unit investment trusts, mutual funds, and exchange-traded funds. Claymore Advisors, LLC, an affiliate of Claymore Securities, serves as investment adviser to the Claymore ETFs.

About CurtCo Robb Media LLC

CurtCo Robb Media LLC is the Index provider. CurtCo Media, an affiliate of CurtCo Robb Media LLC, serves the ultra-luxury market with a network of leading lifestyle publications, including Robb Report, an acclaimed journal of connoisseurship, as well as Worth, ShowBoats International, Art & Antiques, The Robb Report Collection, Robb Report Luxury Home, Robb Report Vacation Homes, Robb Report MotorCycling, Robb Report Home Entertainment, Robb Report Luxury Resorts, Robb Report Luxury Hotels, Robb Report Russia, Robb Report Sports & Luxury Automobile, San Diego, Gulfshore Life, and Sarasota magazines. New publications in 2007 include Robb Report Vertical Living and The Robb Report Watch Collector.

Risks and Considerations

Investors should consider the following risk factors and special considerations associated with investing in the Fund, which may cause you to lose money.

Investment Risk: an investment in the Fund is subject to investment risk, including the possible loss of the entire principal amount that you invest.

Equity Risk: A principal risk of investing in the Fund is equity risk, which is the risk that the value of the securities held by the Fund will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of equity securities of an issuer held by the Fund; the price of common stock of an issuer may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the common stocks and other equity securities held by the Fund. In addition, common stock of an issuer in the Fund’s portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition. Common stock is subordinated to preferred stocks, bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater dividend risk than preferred stocks or debt instruments of such issuers. In addition, while broad market measures of common stocks have historically generated higher average returns than fixed income securities, common stocks have also experienced significantly more volatility in those returns.

Luxury Risk: The success of companies that sell luxury goods and services may depend heavily on the disposable household income and consumer spending of a relatively small segment of the general population, rather than the consumer population as a whole. Changes in consumer taste among such segment of the population can also affect the demand for, and success of, luxury goods and services in the marketplace. Consumer spending on luxury goods and services can also be adversely affected as a result of declines in consumer confidence levels, even if prevailing economic conditions are favorable. In an economic downturn, consumer discretionary spending levels generally decline, often resulting in disproportionately large reductions in the sale of luxury goods and services.

Foreign Investment Risk: The Fund’s investments in non-U.S. issuers may involve unique risks compared to investing in securities of U.S. issuers, including, among others, greater market volatility than U.S. securities and less complete financial information than for U.S. issuers. In addition, adverse political, economic or social developments could undermine the value of the Fund’s investments or prevent the Fund from realizing the full value of its investments. Financial reporting standards for companies based in foreign markets differ from those in the United States. Finally, the value of the currency of the country in which the Fund has invested could decline relative to the value of the U.S. dollar, which may affect the value of the investment to U.S. investors. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, are under no obligation to distribute shareholder communications to the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities.

Non-Correlation Risk: The Fund’s return may not match the return of the Index for a number of reasons. For example, the Fund incurs a number of operating expenses not applicable to the Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund’s securities holdings to reflect changes in the composition of the Index. The Fund may not be fully invested at times, either as a result of cash flows into the Fund or reserves of cash held by the Fund to meet redemptions and expenses. If the Fund utilizes a sampling approach or futures or other derivative positions, its return may not correlate as well with the return on the Index, as would be the case if it purchased all of the stocks in the Index with the same weightings as the Index.

Small and Medium-Sized Company Risk: Investing in securities of small and medium-sized companies involves greater risk than is customarily associated with investing in more established companies. These companies’ stocks may be more volatile and less liquid than those of more established companies. These stocks may have returns that vary, sometimes significantly, from the overall stock market.

Replication Management Risk: Unlike many investment companies, the Fund is not “actively” managed. Therefore, it would not necessarily sell a stock because the stock’s issuer was in financial trouble unless that stock is removed from the Index.

Issuer-Specific Change: The value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. The value of securities of smaller issuers can be more volatile than that of larger issuers.

Non-Diversified Fund Risk: The Fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.

In addition to the risks described above, there are certain other risks related to investing in ETFs. These risks, as well as additional risks specific to a particular ETF, are described further in each ETF’s respective prospectus. Please read the prospectus for more detailed information

Claymore ETFs are listed on the AMEX or the NYSE, depending on the ETF listing, the same way as shares of a publicly-traded company. This Claymore ETF is listed on the NYSE. Claymore ETFs can be purchased through most brokerage accounts. They can be bought and sold throughout the day on the AMEX or the NYSE, depending on the ETF listing, during normal trading hours.

The Fund issues and redeems Shares at NAV only in large blocks of 200,000 Shares (each block of 200,000 Shares called a “Creation Unit”) or multiples thereof. As a practical matter, only broker-dealers or large institutional investors with creation and redemption agreements and called Authorized Participants (“APs”) can purchase or redeem these Creation Units.

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.

Deliveries of Fund securities to redeeming investors generally will be made within three business days. Due to the schedule of holidays in certain countries, however, the delivery of in-kind redemption proceeds may take longer than three business days after the day on which the redemption request is received in proper form. In such cases, the local market settlement procedures will not commence until the end of the local holiday periods. See the Fund’s SAI for a list of the local holidays in the foreign countries relevant to the Fund.

The Claymore/Robb Report Global Luxury Index ETF and its Shares are not sponsored, endorsed, sold or promoted by CurtCo Robb Media, LLC, Robb Report Magazine and its affiliates (“Licensor”). Licensor makes no representation or warranty, express or implied, to the shareholders of the Fund or any member of the public regarding the advisability of investing in or trading securities generally or in the Fund particularly or the ability of the Robb Report Global Luxury Index to track general stock market performance. Licensor’s only relationship to the Investment Adviser is the licensing of certain trademarks and trade names of Licensor and of the Robb Report Global Luxury Index, which is determined, composed and calculated solely by Licensor without regard to Investment Adviser or the Claymore/Robb Report Global Luxury Index ETF. Licensor has no obligation to take the needs of the Investment Adviser or the shareholders of the Fund into consideration in determining, composing or calculating the Robb Report Global Luxury Index. Licensor is not responsible for and has not participated in the determination of the prices of the Shares of the Fund or the timing of the issuance or sale of such Shares or in the determination or calculation of the equation by which the Shares are to be converted into cash. Licensor has no obligation or liability in connection with the administration, marketing, or trading of the Fund or its Shares.

Investors should consider the investment objectives and policies, risk considerations, charges and ongoing expenses of the ETFs carefully before they invest. The prospectus contains this and other information relevant to an investment in the ETFs. Please read the prospectus carefully before you invest or send money.

For more information, please contact a securities representative or Claymore Securities, Inc., 630-463-4000. www.claymore.com/etfs.


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