Globe -- New wave in etf'sGlobe says ClaymorETFs may be the new wave in ETFs
2006-02-23 08:06 ET - In the News
Shares issued 3,000,000
CRQ Close 2006-02-22 C$ 10.02
The Globe and Mail reports in its Feb. 23, edition that ClaymorETFs FTSE RAFI Canadian Index Fund, which started trading on the Toronto Stock Exchange on Feb. 22, may be the new wave in ETFs. The Globe's Rob Carrick, writing in Personal Finance, suggests the ETF should have used the name "Index Beater." He explains that, unlike regular ETFs that simply mirror a basic stock or bond index, ClaymorETFs screens out losers from its index. Critics may say this is simply an active picking strategy that, as in the case of mutual funds, may lead to underperformance. However, ClaymorETFs seems to be doing well. Claymore Investments, which owns the ETF, says a $10,000 investment in ClaymorETFs in 1999 grew to $34,092 by the end of last year. This is better than $10,000 invested in the S&P/TSX 60 index over the same period, which would be $17,769 including dividends. ClaymorETFs comprises 63 stocks weighted by total cash dividends, free cash flow, total sales and book equity value. Standard ETFs weight the stocks according to market capitalization. Mr. Carrick says the ClaymorETFs strategy succeeds by avoiding big, valuable stocks that are vulnerable to pullbacks. His only advice is ClaymorETFs should change its name.