Three More From Claymore: Two Globals and a Vaccine To Boot

Claymore has been launching ETFs pretty steadily since its first ones appeared in September 2006, and now has 26 in its lineup. It launched five last week, including the High Income and Sudan-Free ETFs covered earlier. The three other product launches featured two unique global sector funds and one addition to Claymore’s ever-expanding style box lineup.

Global Exchanges
The most interesting of the new ETFs is the Claymore/Clear Global Exchanges, Brokers and Asset Managers Index ETF (AMEX: EXB). The fund captures the performance of 100 companies whose primary business activities include the operation of a securities exchange or a brokerage or asset management firm. There were other ETFs that included these types of companies, says Claymore senior managing director, Christian Magoon, who heads the firm’s ETF development activities, but none were truly global. The industry has seen significant globalization in recent years (think of the NYSE buying Euronext), and Magoon saw an “a huge opportunity” to launch a fund in this space. The fund is based on a Clear Indexes LLC benchmark and has an expense ratio of 0.65%.

According to the Claymore Web site, the top five companies in the index are, in descending order, Franklin Resources, Goldman Sachs, Morgan Stanley, Merrill Lynch and NYSE Euronext. More than 65% of the portfolio is invested in U.S.-domiciled companies, while the balance of companies is domiciled in Europe and Asia-Pacific. The underlying index has a high underlying price-to-earnings ratio of 28, reflecting the heavy Financials weighting and high valuations in the exchange market.

The prospectus is available here.

Vaccines
The second global fund launched by Claymore is the Claymore/Clear Global Vaccine Index ETF (AMEX: JNR), which Magoon characterized as a subsector play. He says that vaccines are an area that is attracting a lot of money recently, thanks to increased global attention on the need for new and more effective vaccines. Magoon cites as examples the fact that Merrill Lynch has repeatedly highlighted the field in its reports and investments; the focus vaccines receive from the Bill & Melinda Gates Foundation; and the re-emergence of diseases once thought eradicated, such as polio. The recent G8 summit in Germany also saw member countries pledge to devote $60 billion to fighting infectious diseases in Africa.

Magoon notes that the vaccine ETF is one of a number of socially conscious ETFs that Claymore offers, including the aforementioned Claymore/KLD Sudan-Free Large-Cap Core ETF (AMEX: KSF) and certain water and “green” ETFs.

The obvious criticism of the vaccine ETF is that its focus is diluted by the conglomerate nature of the pharmaceutical industry. JNR’s underlying index includes 40 companies involved in the development and marketing of vaccines, with the top five companies being Bristol-Myers Squibb, GlaxoSmithKline, Solvay, Merck and Novartis. Those pharmaceutical giants have extremely diverse operations, and the contribution of vaccines to the bottom line is small. The fund does include smaller, more “pure-play” companies operating in the vaccine space, but they might be overwhelmed by the big Pharma contributions. U.S. companies represent roughly 63% of the index, and its P/E ratio is 14.5.

The prospectus is available here.

Large-Cap Value
Rounding out the launches is the new Claymore/Robeco Boston Partners Large-Cap Value ETF (AMEX: CLV), which tracks 100–300 U.S. large-cap value stocks sorted by a quantitative screening methodology that looks at valuation, momentum and business fundamentals. CLV charges 0.60% in expenses, and is the latest addition to Claymore’s growing platform of “style-box” funds.

The prospectus is available here.

Philosophy
Why all the one-off funds?

Magoon says that Claymore is not necessarily focusing on building its lineup of sector indexes, but that the company is looking to launch unique products and to bring new index providers into the ETF market. It is also looking to take new approaches to areas that are already covered by existing ETFs.“When we see an opportunity, we’re going to take it. Our biggest marketing problem is that we don’t have a one-step approach,” he says in regard to the diversity of Claymore’s funds. “We just don’t believe that one size fits all.”