Representatives of most ETF firms don’t like seeing their products on ETF Deathwatch, although some follow the “any publicity is good publicity” theory. Then there is Claymore, a firm that seems to take avoiding ETF Deathwatch to great extremes.

Last Friday (8/20), a Claymore press release trumpeted the “launch” of a new ETF – the Claymore Wilshire Micro-Cap ETF (WMCR). However, when I checked with the NYSE and Nasdaq, they informed me there were no new listings from Claymore on Friday. A quick check of my quote screen did show a security trading with that ticker symbol, but its name was identified as the Claymore/Sabrient Stealth ETF.

Upon further investigation it was revealed that Claymore is staging another Extreme Makeover: ETF Edition. You may recall that in late July 2009 Claymore/Great Companies Large-Cap Growth Index ETF (XGC) became Claymore/BNY Mellon International Small Cap LDRs ETF (XGC). The result was a completely different fund with zero overlap of holdings, but with the same ticker symbol and a historical track record better than its new peers.

The current makeover is stranger in many respects. First, Claymore changed the ticker symbol as well as the name this time around. What was known as Claymore/Sabrient Stealth ETF (STH) on Thursday became Claymore Wilshire Micro-Cap ETF (WMCR) on Friday. Only the CUSIP identifier code remained the same.

By changing both the name and the ticker, Claymore avoided having to close and liquidate one fund and open another. Just a week prior, on August 13, Claymore announced it was closing four of its funds and could have just as easily made it five by including STH. STH has been on ETF Deathwatch more than a dozen times, so no one would have been surprised to see it closed.

The second strange aspect of this makeover is that the new ETF is now saddled with a long-term below-average track record. From its inception on September 21, 2006 the ETF has a cumulative loss of -35.9%. Meanwhile, the primary competitor in its new micro-cap category, iShares Russell Microcap (IWC), held its loss to -25.7% over the same period.

Claymore has an “exclusive partnership with Wilshire” and is the only ETF provider using Wilshire indexes. I don’t understand why Wilshire would allow their name to be used on a product with such a substandard track record when they could have just as easily started fresh.

I contacted Claymore for an explanation as was informed that the “critical mass” behind STH and the “cost benefits” of not having to close one fund and open another were primary reasons behind this approach. The fund was very small before and remains small now, so the amount of money at stake is relatively insignificant and stretches the definition of critical mass. Seeing as how the bulk of these assets are probably the sponsor’s seed money, getting shareholder approval was likely not an obstacle.

The new incarnation of this ETF will carry an expense ratio of 0.50%. Additional information can be found on the WMCR summary page and in the WMCR fact card (pdf).

WMCR will not be counted as a new ETF and STH will not be counted as a closure in the ETF Statistics. There was not a new listing, and there was no closure. We will record it as a name and ticker symbol change.

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.