Claymore, the ETF sponsor that has closed 17 funds and has 12 more on ETF Deathwatch, introduced three new ETFs yesterday (3/9/10). They appear destined for a similar fate.
The three new ETFs are Claymore Wilshire 5000 Total Market ETF (WFVK), Claymore Wilshire 4500 Completion ETF (WXSP), and Claymore Wilshire US REIT ETF (WREI). If these sound to you like clones of existing ETF products, then you are not alone. Claymore is marketing them as access to the “pure and complete” indexes from Wilshire. However, the Wilshire indexes and Dow Jones Total Market indexes are essentially duplicates of each other.
According to an April 2009 press release from Dow Jones, “the Dow Jones Total Stock Market Index family is identical in all aspects to the former Dow Jones Wilshire index family, including methodology, composition and historical data back to 1987.”
To Claymore these new ETFs are pure and complete. To me, they are redundant and unnecessary “me too” products. But don’t take my word for it, review the following and decide for yourself:
Claymore Wilshire 5000 Total Market ETF (WFVK) (summary) seeks investment results that correspond to the performance of the Wilshire 5000 Total Market Index. The fund’s expense ratio is 0.12%.
WFVK will compete with SPDR Dow Jones Total Market (TMW) (overview), which tracks the Dow Jones U.S. Total Stock Market Index, formerly known as the Dow Jones Wilshire 5000 Composite Index, and before that known as the Wilshire 5000. Prior to April 1st, 2009, the SPDR Dow Jones Total Market ETF was known as the SPDR DJ Wilshire Total Market ETF. TMW currently has an expense ratio of 0.21%.
Top holdings and sector allocations of the two ETFs are virtually identical. WFVK currently has an expense advantage and potentially less tracking error by holding 4,108 stocks instead of the 1,029 of TMW. TMW has the brand and time in market advantage.
Claymore Wilshire 4500 Completion ETF (WXSP) (summary) seeks investment results that correspond to the Wilshire 4500 Completion Index. The Wilshire 4500 is composed of the Wilshire 5000 minus the stocks in the S&P 500. The fund’s expense ratio is 0.18%.
WXSP will compete with Vanguard Extended Market (VXF) (overview), which tracks the Standard & Poor’s Completion Index. It contains all of the U.S. common stocks regularly traded except those included in the Standard & Poor’s 500 Index. VXF has a lower expense ratio of 0.15% and holds slightly fewer stocks (3,015 versus 3,518).
Claymore Wilshire US REIT ETF (WREI) (summary) seeks investment results that correspond to the Wilshire US Real Estate Investment Trust Index. The expense ratio is 0.32%.
WREI will compete with SPDR Dow Jones REIT (RWR) (overview), which tracks the Dow Jones U.S. Select REIT Index. Prior to April 1st, 2009, the SPDR Dow Jones REIT ETF was known as the SPDR DJ Wilshire REIT ETF. Both funds hold 82 REITs in nearly identical proportions while RWR has a lower expense ratio of 0.25%.
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.