The Canadian arm of exchange traded fund provider Claymore Investments has announced that all Claymore ETFs listed on the Toronto Stock Exchange will now offer a distribution reinvestme
The Canadian arm of exchange traded fund provider Claymore Investments has announced that all Claymore ETFs listed on the Toronto Stock Exchange will now offer a distribution reinvestment plan, pre-authorised cash contribution plan and systematic withdrawal plan for unitholders starting next month.
“We are very excited to be able to bring this innovation to the global ETF industry and to Canadian marketplace,’ says Som Seif, president and chief executive of Claymore Investments. ‘We are continually looking at ways to help improve the ETF structure and make it easier for investors of all sizes to invest more effectively and efficiently. Given trading commissions, we generally find ETFs have not been best suited for small investors, dollar cost averaging strategies or income withdrawal plans.’
Effective February 2009, under the Automatic Dividend Reinvestment Plan (Auto Drip), any distributions made by a Claymore ETF are automatically used to purchase additional units of the Claymore ETF making the distribution. Unitholders who wish to receive cash distributions from the Claymore ETFs may opt-out of the Auto Drip. The Auto Drip Plan allows unitholders to acquire additional units to their investment without incurring additional trading commissions.
The Pre-Authorized Cash Contribution Plan (Pacc Plan) allows existing unitholders of Claymore ETFs to make regular monthly, quarterly or annual purchases of units. It offers unitholders the ability to dollar cost average into Claymore ETFs in a commission-free manner.
The Claymore ETF Systematic Withdrawal Plan (SWP) allows an existing unitholder of any Claymore ETF to withdraw a fixed amount of money from that specific Claymore ETF on a monthly, quarterly or annual basis. Unitholders may use the SWP to potentially supplement the income they are receiving from other sources without incurring additional trading commissions.
The Auto Drip, Pacc Plan and SWP will be available on the entire family of Claymore ETFs listed on the Toronto Stock Exchange and on both common units and adviser class units.