Lisle, Illinois-based Claymore, the ETF issuer that was acquired by Guggenheim Partners earlier this year, announced last week that it will close four of its lightly-traded ETFs. December 11 will be the last day of trading for the following funds:
- Claymore/Morningstar Manufacturing Super Sector Index ETF (MZG)
- Claymore/Morningstar Information Super Sector Index ETF (MZN)
- Claymore/Morningstar Services Super Sector Index ETF (MZO)
- Claymore U.S. -1 – The Capital Markets Index ETF (UEM)
“We have taken a reflective review of our current product lineup and after careful evaluation, we feel that these changes are in the best interest of shareholders,” said Christian Magoon, President of Claymore Securities, Inc. The NYSE Arca will halt trading in the four ETFs by December 14, and any investors remaining on December 18 will receive a cash distribution into their brokerage account representing the value of their shares on that date.
As their names suggest, the three “Super Sector” ETFs had similar investment strategies. MZG is based on an index composed of companies in “smokestack” industries that process raw materials into physical goods that are sold into industrial and consumer markets. The index underlying MZN includes companies that support and facilitate the exchange of ideas and information as a basis for commerce while MZO invests in stocks of firms whose main source of revenue comes from the provision of services. These three ETFs launched in August 2008, but never gained much traction, accumulating aggregate assets of about $10 million.
UEM was a multi-asset ETF that held common stocks, government debt, government agency debt, mortgage-backed securities, and investment grade corporate bonds. According to the NSX, this ETF has about $9 million in assets. While the closure of these funds is certainly less than ideal for Claymore, it doesn’t represent a major setback. The four ETFs to be closed accounted for less than 1% of the firm’s total ETF assets. Claymore has several funds with more than $100 million in assets, including its BRIC ETF (EEB), China Small Cap ETF (HAO), Global Water ETF (CGW), and Global Solar Energy ETF (TAN).
Following the closure of these funds, Claymore will offer approximately 30 ETFs with aggregate assets of $2.5 billion. However, 11 of these funds are of a similar size as the soon-to-be-shuttered ETFs, with total assets of less than $10 million each.
Disclosure: No positions at time of writing.