But Heather Bell for Index Universe says this isn't so radical as it may sound, because it's what the Claymore/Raymond James SB-1 Equity Fund (RYJ) was designed to do. The fund contains a clause that after 18 months of trading, if it trades at a discount of 10% or more for more than 75 straight days, it will convert to an ETF.
The fund has been trading at a 52-week average discount of 10.15%, but periodically has dipped below the 10% threshold and restarting itself. Claymore's board stepped in to put the conversion into effect because the discount has usually been well above the 10% mark.
The fund's goal is capital appreciation, achieved by investing in equities rated "SB-1," or "Strong Buy 1." It's most heavily weighted in information technology (24.4%), energy (18.3%) and consumer discretionary (17.4%). It's up 8.8% year-to-date.
The conversion is still subject to approval by the shareholders. Claymore President Christian Magoon says they don't anticipate any other Claymore CEFs converting to ETFs.