Shipping ETF (SEA) Sets Sail For The Second Time

by on June 11, 2010 | ETFs Mentioned:

After a brief and bizarre disappearance, the ETF with the most significant allocation to Greek equities has returned. Claymore announced today the launch of the Shipping ETF (SEA), a fund designed to offer exposure to the global shipping industry by tracking the Delta Global Shipping Index. The fund name and ticker may sound familiar; Claymore was forced to shut down the popular predecessor to the new ETF earlier this year as a result of a unique transaction-related hangup.

As a result of the acquisition by Guggenheim in late 2009, the existing investment advisory agreements for Claymore’s ETFs were terminated, and shareholders were asked to approve new agreements as a result of the change in control. For most funds, that was no problem; the majority of new agreements were overwhelmingly ratified. But securing the votes needed for SEA proved to be a challenging task, due in part to the significant non-U.S. shareholder presence in the fund. After failing to reach a quorum in the allowable period, SEA was jettisoned from the Claymore lineup in late April (see What Happened To The Shipping ETF?).

Claymore execs pledged at the time to launch a new shipping ETF in short order, citing the popularity of the fund (it had about $150 million in assets before closing down). And now they’ve made good on that promise, rolling out a nearly identical ETF about six weeks after the first one shut down. “We are pleased to be launching the Claymore Shipping ETF, which will provide investors with cost-efficient and broad access to the global shipping industry,” said William Belden, Managing Director at Claymore in a press release. “Because our first shipping ETF was so popular with investors and advisors, the successor fund largely mirrors its structure and seeks to track the performance of the same index.” Claymore now faces the challenge of rebuilding the asset base that was distributed earlier this year.

The index underlying SEA consists of companies deriving at least 80% of their revenues from operating or leasing ships or from the transportation of goods via ship. Approximately 20% of SEA’s assets are Greek equities, making the fund the closest thing to a Greek ETF currently available.

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Disclosure: No positions at time of writing.