December 11, 2009 will be the last day of trading for Claymore/Morningstar Manufacturing Super Sector Index ETF (MZG), Claymore/Morningstar Information Super Sector Index ETF (MZN), Claymore/Morningstar Services Super Sector Index ETF (MZO), and Claymore U.S.-1 – The Capital Markets Index ETF (UBG).
My suggestion to anyone who holds these funds is to sell your shares before the closure and liquidation process begins. All have extremely low activity, including many days of zero volume. Use a limit order and give it a few days to fill. If you wait until the last day, don’t be surprised to find no bids anywhere near a fair price.
All four of these ETFs were identified in the current issue of ETF Deathwatch (and almost every prior issue) with MZO #4, MZN #11, UBG #33, and MZG at #52. Claymore is very familiar with the ETF closure process having shut down 13 of them on prior occasions.
Strangely, Claymore has other products that are in just as bad as shape as these. Claymore ETFs and ETNs currently on ETF Deathwatch, but which somehow survived the November 25 announcement, include the following:
- Claymore/Ocean Tomo Patent (OTP)
- Claymore/Zacks Mid-Cap Core ETF (CZA)
- Claymore U.S. Capital Markets Bond ETF (UBD)
- Claymore CEF Index GS Connect ETN (GCE)
- Claymore/Ocean Tomo Growth (OTR)
- Claymore/Zacks Country Rotation (CRO)
- Claymore/Sabrient Defender (DEF)
- Claymore/BNY Mellon EW Euro-Pacific LDRs (EEN)
- Claymore/Beacon Global Exchanges, Brokers, & Asset Management (EXB)
- Claymore/Zacks Dividend Rotation (IRO)
- Claymore/Sabrient Stealth (STH)
- Claymore/BNY Mellon International Small Cap LDRs (XGC)
- Claymore/Robb Report Global Luxury (ROB)
A Claymore spokesman informed me that some of the funds are approaching their three-year anniversary and are expected to receive a good rating from Morningstar at that time. They hope assets will start moving in once the coveted Morningstar rating is received. This is supposedly why OTP, DEF, and some others were spared the axe at this time.
All of the products listed above have pathetic trading volume and probably have asset levels that make them unprofitable. I pointed out back in March that some Claymore ETFs like UBD do not have market makers and have bid/ask spreads in excess of 100%. UBD was featured again in my Dead ETF Walking article. Claymore performed an extreme makeover on XGC back in July. So far no one has fallen for that trick and it is still on Deathwatch.
Claymore has brought many great ETFs to market. This does not mean they are successful ETFs. I suggest you avoid the products listed above.
Disclosure covering writer, editor, and publisher: No other positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.