Two weeks after announcing that it was pulling 11 of its ETFs from the market, Claymore Securities has launched three new ones. The new additions are the Claymore U.S.-1- The Capital Markets Index ETF, Claymore U.S. Capital Markets Bond ETF and Claymore U.S. Micro-Term Fixed Income ETF.
Company Press Release
Claymore Securities Inc., the third-fastest growing exchange-traded fund provider in 2007(a), today launched three broad market ETFs representing the value of the U.S. capital markets as a whole. The Claymore Capital Markets ETFs that launched on the American Stock Exchange include the Claymore U.S.-1--The Capital Markets Index ETF (AMEX:UEM), the Claymore U.S. Capital Markets Bond ETF (AMEX:UBD) and the Claymore U.S. Micro-Term Fixed Income ETF (AMEX:ULQ).
The CPMKTS Capital Markets Index(SM) family, developed by Dorchester Capital Management LLC, is the only set of indices available that represents the three key segments of the US capital markets--stocks, investment grade bonds and liquidity instruments -- and tracks the relationship of the segments to each other.
"Claymore is pleased to be the first to offer investors core ETFs that provide exposure to the broad U.S. investment grade capital markets. UEM offers access to all three segments of the capital markets in one investment vehicle," said Christian Magoon, Senior Managing Director and Head of the ETF Group for Claymore Securities. "In addition to UEM, ULQ and UBD offer investors the opportunity to formulate portfolios that meet individual risk/return profiles with custom blends of the major market segments," Magoon highlighted.
"Diversification is suggested as the key to investment success but there has been no easy way to access the entire investment grade U.S. capital markets until now," said Warren Schmalenberger, Founder and CEO of Dorchester Capital Management LLC, which created the indexes on which the Claymore Capital Markets ETFs are based. "Investment products based on the Capital Markets Indexes provide transparent low cost options with such broad diversification. The CPMKTS Index is the first to represent the entire investment grade capital markets - including stocks, bonds and income securities with maturities of less than one year," added Schmalenberger.
The Claymore U.S.-1 -The Capital Markets Index ETF (AMEX: UEM)
The Fund seeks investment results that correspond generally to the performance, before the Fund's fees and expenses, of the CPMKTS - The Capital Markets Index (the "CPMKTS Index") which includes equity, fixed income and money market securities. The Index is designed to be a long term measure of the three segments of the U.S. investment grade capital markets.
The Claymore U.S. Capital Markets Bond ETF (AMEX: UBD)
The Fund seeks investment results that correspond generally to the performance, before the Fund's fees and expenses, of a fixed income securities index called CPMKTB - The Capital Markets Bond Index (the "CPMKTB Index").The Index is designed to be a long-term measure of the performance of the U.S. investment grade bond markets.
Claymore U.S. Micro-Term Fixed Income ETF (AMEX: ULQ)
The Fund seeks investment results that correspond generally to the performance, before the Fund's fees and expenses, of a money market and short-term fixed income securities index called CPMKTL - The Capital Markets Liquidity Index (the "CPMKTL Index"). The Index is designed to represent the traditional investment grade securities in the U.S. money markets and in the micro-term fixed income capital markets. The Fund is not a money market fund and thus does not seek to maintain a stable net asset value of $1.00 per share
About Claymore Securities
Claymore Securities, Inc. is a privately-held financial services company offering unique investment solutions for financial advisors and their valued clients. Claymore entities have provided supervision, management, servicing or distribution on approximately $18.5 billion in assets as of December 31, 2007. Claymore currently offers exchange-traded funds, unit investment trusts and closed-end funds. Claymore Advisors, LLC, an affiliate of Claymore Securities, serves as investment adviser to the Fund.
About Dorchester Capital Management LLC
Dorchester Capital Management LLC is a Houston-based company focused on designing financial products for the professional investment community. The data used in the analysis is from Dorchester's extensive data base of the U.S. securities market. CPMKTS(SM)--The Capital Markets Index is carried on The American Stock Exchange under the symbol CPMKTS, with data updates every 15 seconds. The Amex also publishes sub-indexes CPMKTE, CPMKTB and CPMKTL, tracking equities, bonds and liquidity.
There can be no assurance that an ETF will achieve its investment objective. An investment in the Fund is subject to investment risk, which is the possible loss of the entire principal amount that you invest. There is a risk that the value of the securities held by the Fund will fall due to general market and economic conditions. ULQ is not a money market fund and thus does not seek to maintain a stable net asset value of $1.00 per share.
Non-diversified ETFs invest a greater portion of assets in securities of individual issuers than a diversified ETF and therefore, may cause greater volatility. ETFs are not "actively" managed and would not necessarily sell a stock because the stock's issuer was in financial trouble unless that stock is removed from the index.
ETFs are subject to potential tracking errors and returns may not match the returns of the indices. ETFs that focus on micro, small or medium-sized companies generally experience greater price volatility and risk than investing in more established companies.
The Fund's investments in U.S. registered, dollar-denominated bonds of foreign corporations, governments, agencies and supra-national agencies 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.
The Fund is also subject to income risk, which includes credit/default, call/prepayment, and interest rate risk. Credit/default risk refers to the ability of an issuer to make timely payments of interest and principal. Call/prepayment risk is that during periods of falling interest rates, an issuer of a callable bond may exercise its right to pay principal on an obligation earlier than expected. This may result in the Fund's having to reinvest proceeds at lower interest rates, resulting in a decline in the Fund's income. As interest rates rise, the value of fixed-income securities held by the Fund are likely to decrease. Securities with longer durations tend to be more sensitive to interest rate changes, making them more volatile than securities with shorter durations.
The bonds in the Fund's portfolio may underperform the returns of other bonds or indexes that track other industries, markets, asset classes or sectors.
Extension risk is the risk that an issuer will exercise its right to pay principal on an obligation later than expected. This may happen when there is a rise in interest rates. Under these circumstances, the value of the obligation will decrease and the Fund's performance may suffer from its inability to invest in higher yielding securities.
The Fund's investment in a derivative is a financial contract, whose value depends on, or is derived from, the value of and underlying asset such as a security or index, which increases the risk of loss for the Fund.
The Fund's use of a representative sampling approach will result in its holding a smaller number of securities than are in the Index. As a result, an adverse development respecting an issuer of securities held by the Fund could result in a greater decline in net asset value than would be the case in the Fund held all of the securities in the Index.
Liquidity risk exists when particular investments are difficult to purchase or sell. If the Fund invests in illiquid securities or securities that become illiquid, Fund returns may be reduced because the Fund may be unable to sell the illiquid securities at an advantageous time or price.
The Fund may invest in mortgage-backed securities issued by FNMA, GNMA or FHLMC. While securities issued by GNMA are backed by the full faith and credit of the U.S. government, securities issued by FNMA and FHLMC are not and there can be no assurance that the U.S. government would provide support to its agencies or instrumentalities where it is not obliged to do so. Mortgage-backed securities are subject to prepayment risk and extension risk and may react differently to changes in interest rates than other bonds, which may significantly reduce their value. There is also risk associated with the roll market for mortgage-backed securities.
The financial services industries are subject to extensive government regulation, can be subject to relatively rapid change due to increasingly blurred distinctions between service segments, and can be significantly affected by availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, and price competition.
Please refer to the Funds' prospectus for more complete information.
Investors should consider the investment objectives and policies, risk considerations, charges and expenses of any investment product carefully before investing. The prospectus contains this and other relevant information. Investors should read the prospectus carefully before investing or sending money. For this and more information, please contact a securities representative or Claymore Securities, Inc.