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NEW FILINGS
Super Sectors (Plus)
We've seen sectors, industries, and vertical investing … now, get ready for "Super Sectors." Claymore Securities has filed papers with the SEC for three "Super Sector" ETFs based on Morningstar indexes:
- Claymore/Morningstar Information Super Sector Index ETF
- Claymore/Morningstar Services Super Sector Index ETF
- Claymore/Morningstar Manufacturing Super Sector Index ETF
The funds will list on the American Stock Exchange; there is no word yet on expense ratios or tickers.
The "Super Sectors" reflect Morningstar's belief that all U.S. companies can be classified into three core categories:
- Information, including software, hardware, media and telecom
- Services, including healthcare, consumer services, business services and financial services
- Manufacturing, including consumer goods, industrial materials, energy and utilities.
Morningstar and Claymore will have to demonstrate that these "super sectors" really function as unique asset classes. Perhaps they can do that, but the bar of proof is high.
The prospectus is available here.
Dividend Capture ETF
Included in the same prospectus as the Super Sector filing is a fourth and possibly very popular Claymore fund: the Claymore/Zacks Dividend Capture ETF. This fund uses a complicated, quantitative strategy in an attempt to achieve one the oldest tricks in the investing book: the dividend capture strategy.
The idea behind "capturing dividends" is to buy stocks that are about to pay a dividend, hold them for 61-days (to qualify for the favorable 15 percent dividend tax rate), book the dividend and then sell. You take the proceeds and buy the next dividend paying stock. The strategy aims to maximize income, and it works: there has been an explosion of closed-end dividend capture funds recently, and they are paying somewhere between 9-11 percent interest. Of course, there are risks, but as an alternative to a lethargic bond market, dividend capture strategies represent an interesting opportunity.
The exact methodology behind the Claymore/Zacks fund is complicated (and detailed in the prospectus, on page 20). It should, however, allow the fund to achieve something close to the yield of the closed-end funds; perhaps not quite as high, but close. Given the advantages of open-end funds over closed-end products, the new fund will likely attract a great deal of interest.
Betting On Baubles
It's just wonderful news, dahhlllling…
Claymore Securities filed papers for a new "luxury goods" ETF. The new Claymore Robb Report Global Luxury ETF will track the Robb Report Index, a 20-50 stock index composed of companies that provide luxury goods to the rich and famous. Think yachts, diamonds, caviar and fancy clothes.
Companies are chosen from around the world, more-or-less at the discretion of the editors of the Robb Report. Companies must have a market cap of at least $500 million and must derive 60% of their revenues from the sale of luxury goods. There is no word yet on fees, or on where the fund will list.
Luxury goods often get trotted out as an interesting investment category. For one, the rich keep getting richer, and the growing disparity of wealth is fueling a boom in luxury goods. Just as importantly, luxury goods providers can be somewhat immune from changes in economic trends: if a recession hits, Larry Ellison isn't going to start shopping at Wal-Mart.
The prospectus is available here.
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