Claymore Securities, Inc. today announced the launch of two new Exchange-Traded Funds (ETFs), the Claymore/Zacks Country Rotation ETF (AMEX: CRO) and the Claymore/Zacks International Yield Hog Index ETF (AMEX: HGI). This brings the firm's total number of ETFs to 29 since entering the ETF market in September of 2006.
"From the inception of Claymore's ETF product line, we have partnered with what we believe to be 'best-in-class' index providers, such as Zacks Investment Research, Inc.," said Christian Magoon, Senior Managing Director at Claymore Securities, and head of the firm's ETF group. "Claymore continues to deliver access to innovation with the industry's first country rotation ETF (CRO) and the first international income-oriented multiple asset class ETF (HGI)."
Claymore/Zacks International Yield Hog Index ETF (AMEX: HGI)
The Fund seeks investment results that correspond generally to the performance, before the Fund's fees and expenses, of an index called the Zacks International Yield Hog Index. The Fund, using a low cost "passive" or "indexing" investment approach, will seek to replicate, before expenses, the performance of the Zacks International Yield Hog Index. The Index is comprised of 150 stocks selected, based on investment and other criteria, from a universe of international companies, global REITs, master limited partnerships, Canadian royalty trusts, American depositary receipts ("ADRs") of emerging market companies and U.S. listed closed-end funds that invest in international companies. The companies in the universe are selected using a proprietary strategy developed by Zacks Investment Research, Inc. The Fund will normally invest at least 90% of its total assets in stocks that comprise the Index. The Zacks International Yield Hog Index selection methodology is designed to identify companies with potentially high income and superior risk-return profiles as determined by Zacks. The Index is designed to select a diversified group of stocks with the potential to outperform the MSCI EAFE Index and other benchmark indices on a risk adjusted basis. The Index constituent selection methodology utilizes multi-factor proprietary selection rules to identify those stocks that offer the greatest potential from a yield and risk/return perspective. The approach is specifically designed to enhance investment applications and investability. The Index is adjusted semi-annually.
Claymore/Zacks Country Rotation ETF (AMEX: CRO)
The Fund seeks investment results that correspond generally to the performance, before the Fund's fees and expenses, of an equity index called the Zacks Country Rotation Index. The Fund, using a low cost "passive" or "indexing" investment approach, will seek to replicate, before expenses, the performance of the Zacks Country Rotation Index. The Index is comprised of 200 stocks selected, based on investment and other criteria, from a universe of international companies based in countries included in the MSCI EAFE Index and including Canada, with the exclusion of companies based in Greece. The companies in the universe are selected using a proprietary methodology developed by Zacks Investment Research, Inc. The Fund will normally invest at least 90% of its total assets in common stock and ADRs that comprise the Index. The Zacks Country Rotation Index uses a proprietary quantitative methodology developed by Zacks to seek to determine those countries with potentially superior risk-return profiles and within those countries select a basket of stocks. The Index is designed to select and weight a group of stocks which have the potential on a risk-adjusted basis to outperform the MSCI EAFE Index and other developed international benchmark indices. The Index constituent selection methodology utilizes multi-factor proprietary selection rules to identify those countries that offer the greatest potential from a risk/return perspective. The approach is specifically designed to enhance investment applications and investability. The Index is adjusted semiannually.
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 May 31, 2007, Claymore entities have provided supervision, management, servicing or distribution on approximately $17 billion in assets through closed-end funds, unit investment trusts, mutual funds, separately managed accounts and exchanged-traded funds. Claymore Advisors, LLC, an affiliate of Claymore Securities, serves as investment adviser to the Fund.
About Zacks Investment Research
Zacks Investment Research, Inc. has more than 25 years of experience in providing institutional and individual investors with the analytical tools and financial information necessary to the success of their investment process. Today Zacks receives daily electronic data feeds and printed research reports on over 10,000 companies from over 200 brokerage firms, produced by more than 3,500 analysts amounting to over 500,000 pages of brokerage research. In addition, Zacks records 25,000 earnings estimate revisions and changes in broker recommendations weekly. Additional information can be found at www.zacks.com.
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.
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, less market liquidity, generally 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.
Canadian Risk (HGI only). As the Fund invests in Canadian royalty trusts and stocks listed on the Toronto Stock Exchange, the Fund is subject to the following risks:
Commodity Exposure Risk. The Canadian economy is very dependent on
the demand for, and supply and price of, natural resources. The
Canadian market is relatively concentrated in issuers involved in
the production and distribution of natural resources. There is a
risk that any changes in these sectors could have an adverse
impact on the Canadian economy.
Reliance on Exports Risk. The Canadian economy is dependent on the
economies of the United States as a key trading partner. Reduction
in spending on Canadian products and services or changes in the
U.S. economy may cause an impact in the Canadian economy.
U.S. Economic Risk. The Canadian economy may be significantly
affected by the U.S. economy, given that the United States is
Canada's largest trading partner and foreign investor. Since the
implementation of the North American Free Trade Agreement (NAFTA)
in 1994, total two-way merchandise trade between the United States
and Canada has more than doubled. To further this relationship,
all three NAFTA countries entered into The Security and Prosperity
Partnership of North America in March 2005, which addressed
economic and security related issues. The new agreement may
further affect Canada's dependency on the U.S. economy.
Structural Risk (Political Risk). In addition, past periodic
demands by the Province of Quebec for sovereignty have
significantly affected equity valuations and foreign currency
movements in the Canadian market.
Emerging Markets Risk (HGI only). Investment in securities of issuers based in developing or "emerging market" countries entails all of the risks of investing in securities of non-U.S. issuers, as described above, but to a heightened degree. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and in price volatility. Emerging market countries may have policies that restrict investment by foreigners, or that prevent foreign investors from withdrawing their money at will.
REIT Risk. (HGI only) Investments in securities of real estate companies involve risks. These risks include, among others, adverse changes in national, state or local real estate conditions; obsolescence of properties; changes in the availability, cost and terms of mortgage funds; and the impact of changes in environmental laws. In addition, a REIT that fails to comply with federal tax requirements affecting REITs may be subject to federal income taxation, or the federal tax requirement that a REIT distribute substantially all of its net income to its shareholders may result in a REIT having insufficient capital for future expenditures. The value of a REIT can depend on the structure of and cash flow generated by the REIT. In addition, like mutual funds, REITs have expenses, including advisory and administration fees, that are paid their shareholders. As a result, you will absorb duplicate levels of fees when the Fund invests in REITs. In addition, REITs are subject to certain provisions under federal tax law. The failure of a company to qualify as a REIT could have adverse consequences for the Fund, including significantly reducing return to the Fund on its investment in such company.
Master Limited Partnership Risk (HGI only). Investments in securities of master limited partnerships involve risks that differ from an investment in common stock. Holders of the units of master limited partnerships have more limited control and limited rights to vote on matters affecting the partnership. There are also certain tax risks associated with an investment in units of master limited partnerships. In addition, conflicts of interest may exist between common unit holders, subordinated unit holders and the general partner of a master limited partnership, including a conflict arising as a result of incentive distribution payments.
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.
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. Since the Index constituents may vary on a semiannual basis, the Fund's costs associated with rebalancing may be greater than those incurred by other exchange-traded funds that track indices whose composition changes less frequently. 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.
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 Changes. 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.
Claymore ETFs are listed on the AMEX 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 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 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.
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 Funds.
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 Fund.
The Products are not sponsored, endorsed, sold or promoted by Zacks Investment Research, Inc. ("Licensor"). Licensor makes no representation or warranty, express or implied, regarding the advisability of investing in securities generally or in the Products particularly or the ability of the Zacks Country Rotation Index ("Index") or the Zacks International Yield Hog Index ("Index") to track general market performance. Licensor's only relationship to the Claymore Advisors, LLC ("Licensee") is the licensing of the Indices which is determined, composed and calculated by Licensor without regard to the Licensee or the Products. Licensor has no obligation to take the needs of the Licensee or the owners of the Products into consideration in determining, composing or calculating the Index. Licensor shall not be liable to any person for any error in the Index nor shall it be under any obligation to advise any person of any error therein.
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 this and more information, please contact a securities representative or Claymore Securities, Inc., 2455 Corporate West Drive, Lisle, Illinois 60532, 800-345-7999 or www.claymore.com/etfs.
NOT FDIC - INSURED -- NOT BANK - GUARANTEED -- MAY LOSE VALUE
Claymore Securities, Inc.
Member NASD/SIPC 07/07
Contacts:
Shawn-Laree de St. Aubin
847.332.2626
sldestaubin@dobbcomm.com
