Claymore Blinks First: Rationalizing the ETF Universe

by: Greg Newton

The overdue process of changing the paper in the bottom of the ETF birdcage began on Friday, when Claymore Securities Inc announced that it would put 11 of its 37 funds out of their misery. Not that anybody’s going to notice; virtually all the money in the ETFs was launch capital, and they together accounted for less than two percent of Claymore’s roughly $2 billion in ETF assets, out of roughly $600 billion invested in US-listed ETFs.

Most importantly, the move does offer some datapoints for a back-of-the-envelope calculation hinting at how many other ETFs may be eligible for similar treatment. Those getting the chop had all been available for more than six months, and had assets of $5.1 million or less, according to data provided by Index Universe for the period through Dec. 31 2007.

Screening the near-enough to 675 ETFs in that dataset on those criteria produced a list of another 37 ETFs, including the entire Ameristock/Ryan Treasury family (5); four other Claymore products that inexplicably missed the cut this time around; 11 First Trust ETFs, including eight from its Alphadex family; an even dozen HealthShares; and miscellaneous droppings from the HLDRs (1), iShares (1), PowerShares (1) and ProShares (2) families.

Of the total 48 soon-to-be and probably-should-be extinct ETFs, 44 were issued in the first half of 2007.

Claymore Securities Announces Changes
Press release
Business Wire Feb. 1 2008