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Claymore launches first dividend rotation ETF on Amex

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Claymore Securities has launched the first dividend rotation exchange-traded fund, the Claymore/Zacks Dividend Rotation ETF, on the American Stock Exchange, bringing to 34 the number of ET

Claymore Securities has launched the first dividend rotation exchange-traded fund, the Claymore/Zacks Dividend Rotation ETF, on the American Stock Exchange, bringing to 34 the number of ETFs launched by Claymore since it entered the market in September 2006.

‘We believe that a dividend rotation investment strategy can offer a variety of benefits to investors,’ says Christian Magoon, a senior managing director head of the ETF group at Claymore Securities.

‘Those benefits may include favourable dividend tax treatment, the possibility of cushioning the impact of losses in stocks during down markets, and offering a potential boost in total return when stocks gain ground. In addition, a rotational strategy contained in an ETF structure may benefit from the tax advantaged nature of an ETF.’

The Claymore/Zacks Dividend Rotation ETF aims to achieve the performance, before fees and expenses, of the Zacks Dividend Rotation Index. The index comprises 100 stocks, based on investment and other criteria from 1,500 of the largest listed companies, based on market capitalisation, that pay dividends at least annually (in any amount).

The index universe consists of all US stocks listed on domestic exchanges, including American depositary receipts. The constituents in the index are selected using a proprietary methodology developed by Zacks Investment Research that includes a market capitalisation of at least USD200m.

The index seeks to maximise dividend income that qualifies for taxation at the lowest current rates. Each rebalancing of the index is designed to exclude companies that have recently paid a dividend and include those that are expected to pay dividends. The index seeks to outperform, on a risk-adjusted basis, the Dow Jones US Select Dividend Index and other benchmarks.

‘We are pleased to support Claymore as they continue to expand their family of ETFs and provide investors with new ways to add dividend solutions to their portfolios,’ says Scott Ebner, senior vice-president of the Amex ETF Marketplace.

Claymore Securities is a privately-owned financial services company that provided supervision, management, servicing or distribution on some USD18.4bn in assets at the end of September through closed-ended funds, unit investment trusts, mutual funds and exchange-traded funds. Zacks Investment Research has more than 25 years of experience in providing institutional and individual investors with analytical tools and financial information.

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