With no apparent warning, Claymore announced yesterday (4/27/10) that the Claymore/Delta Global Shipping Index ETF (former ticker SEA) would be immediately delisted and liquidated. According to the press release, this action was a result of not having reached a shareholder quorum to approve a new advisory agreement. A new advisory agreement between the ETF and its sponsor is required because of the recent acquisition of Claymore by Guggenheim Partners.
SEA is the only Claymore ETF affected, and Claymore has already filed for a new ETF with the same objective and ticker symbol. Claymore will no doubt do everything within its power to get the new Claymore Shipping ETF (anticipated ticker SEA) listed as soon as possible. According to the summary page for the closing fund, it has assets of more than $152 million.
Shareholders were not given a chance to exit their positions prior to the delisting and will now be forced to go through the liquidation process. Claymore stated that liquidation would begin immediately but gave no indication when it would be complete or when shareholders should expect to receive their cash.
Just when investors were starting to get a handle on the risks and nuances of investing with ETFs, they are thrown a new risk – change of ownership risk.
Disclosure covering writer, editor, publisher, and affiliates: 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.