A Brief History Of A Doomed ETF

March 28, 2014 by  
Filed under Commentary, ETF Closings

Claymore securities launched Claymore U.S. Capital Markets Bond ETF (UBD) back on February 12, 2008.  It had an interesting, if not successful, life as an exchange traded fund (“ETF”).  Due to its average daily volume of just 81 shares, it became a charter member of ETF Deathwatch in the inaugural September 2008 edition.

On January 16, 2009, it was one of two ETFs singled out as having zero volume for the year-to-date period.  In February 2009, we pleaded openly to Please Put This ETF Out Of Its Misery when we highlighted the huge bid/ask spread and warned there was no depth behind those quotes.

In March 2009, our Market Maker – Home Edition article explained how investors could effectively become the market maker for UBD due to its then current bid/ask spread of $25.00/$53.50.  Later that month, it was one of the ETFs featured in Dead ETF Walking.  It suffered from low assets and a lack of trading.

Guggenheim eventually became the owner of the Claymore ETF product lineup, and in a last-ditch effort to save UBD, it performed an extreme-makeover on June 1, 2011.  Guggenheim changed the fund from an indexed ETF to actively managed, gave it a new objective, changed its name and ticker symbol to Guggenheim Enhanced Core Bond (GIY), and declared it a “new ETF”.  However, it kept the same CUSIP and 3-year track record, so it wasn’t really new after all.

Last month, Guggenheim finally threw in the towel and announced Guggenheim Enhanced Core Bond (GIY) would close and liquidate.  Friday March 7, 2014 was the last day of trading for the ETF originally known as Claymore U.S. Capital Markets Bond ETF (UBD).  Its 6-year life is now over.

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Comments

Feel free to leave a comment...





Current day month ye@r *