Claymore to Shutter Four Low Volume ETFs

by: Michael Johnston

Claymore, the ETF issuer known for its suite of targeted sector funds and China ETFs, has announced that September 10 will be the last day of trading for four of its exchange-traded funds. The ETFs to be shuttered include:

  • Claymore/Zacks Dividend Rotation ETF (IRO)
  • Claymore/Zacks Country Rotation ETF (CRO)
  • Claymore/Beacon Global Exchanges, Brokers & Asset Managers Index ETF (EXB)
  • Claymore/Robb Report Global Luxury Index ETF (ROB)

IRO and CRO were based on indexes maintained by Zacks that sought to rotate holdings based on proprietary methodologies. EXB was one of the more targeted options withing the Financials Equities ETFdb Category, seeking exposure to companies that operate a security exchange or brokerage/asset management firm as a primary business. ROB offered a “pure play” on the consumer discretionary sector, focusing on manufacturers of high end automobiles, apparel, and accessories.

According to the July ETF data from the National Stock Exchange, ROB was the largest of these funds with about $17 million in assets. IRO maintained about $13 million in assets, while the other two funds stood at only about $3 million. In aggregate, the assets in these four ETFs represent only about 1% of Claymore’s total, which now stands near $3 billion. So while the company’s product line will shrink by close to 10%, the impact on assets will be minimal. Based on the expense ratios and asset levels, the total revenue hit should be less than $250,000 annually.

Each of the four funds launched during 2007; CRO, EXB, and ROB recently passed their three year milestones, while IRO would have hit that mark in October.

“We continue to be committed to developing innovative investment solutions for clients and we want to dedicate our resources to areas of greater investor interest,” said Steven A. Baffico, senior managing director at Claymore Securities, in a press release. “After careful evaluation of our product lineup, we believe these changes are in the best interest of our clients and shareholders.”

Claymore has indeed been active on the product development front this year. The firm recently rolled out its BulletShares suite of target end date corporate bond ETFs, bringing a new level of granularity to the fixed income asset class. Claymore hasn’t been afraid to shut down ETFs that have failed to gain traction in the past; late last year the company shuttered four funds that had been slow to accumulate assets.

Disclosure: No positions at time of writing.

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