What is an ETF?

Exchange-traded funds (ETFs) are one of the fastest growing investment products in today’s global marketplace. Built like mutual funds, ETFs consist of a portfolio of investment, but they trade like individual stocks on major stock exchanges and can be bought or sold at any time in any amount throughout the trading day. Constructed to track the holdings and performance of a defined index of securities, net of expenses, ETFs enable investors to purchase a cost-efficient and diversified portfolio in one transaction. Providing other advantages such as tax efficiency, liquidity and transparency, ETFs are an increasingly popular alternative to investments in stocks and mutual funds. The unique attributes and benefits of ETFs appeal to both individual and institutional investors.

The Structural Safety of Exchange-Traded Funds

Like mutual funds, exchange-traded funds consist of a portfolio of financial securities. As such, each unit of an ETF represents a legal right of ownership over a portion of the assets of that portfolio. As part of the legal requirements of ETFs, all assets invested in the funds are held by the ETF provider’s custodian. This protects investors from any risk of bankruptcy on the part of that ETF manufacture. The custodian for Claymore ETFs is CIBC Mellon.

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Commissions, trailing commissions, management fees and expenses all may be associated with fund investments. Please read the prospectus before investing. The indicated rate of return is the historical annual compounded total return including changes in unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Funds are not guaranteed, their values change frequently and past performance may not be repeated.