Claymore Presentation. Som Seif President & CEO Claymore Investments, Inc.

Transcription

1 Claymore Presentation Som Seif President & CEO Claymore Investments, Inc.

2 Claymore ETFs: Intelligent ETFs for Canada Claymore Investments (Canada) is a subsidiary of Claymore Group (US) Designed for Canadian investors 25 ETFs on the TSX, and 33 ETFs in US Total Firm - $15.5 Billion in total assets $4.5 billion in Canada (4 yrs in business) Why we are different Family of intelligent Exchange Traded Funds ( ETFs ) Institutional managers & research firms Research & intelligence behind every product Low Cost Focus on Performance and Risk Management 2

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4 Canada ETF AUM Growth Claymore ETFs AUM by Month (Since Inception) $4,000,000,000 Total Canadian ETFs $3,500,000,000 $3,000,000,000 $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $ 4 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Current

5 Claymore Investments AUM Growth $5,000,000 $4,500,000 Claymore Investments AUM $4,400,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,100,000 $1,000,000 $800,000 $500,000 $400,000 $500,000 $ Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Current 5

6 Canada ETFs AUM Growth $4,000 AUM & Shares O/S Nov 09 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 6 Dec 09 Oct 09 Nov 09 AUM (milions) # of shares o/s (millions) Dec 09 Oct 09 Nov 09 AUM Shares Dec 07 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 AUM vs AUM/share vs S&P/TSX Composite vs S&P 500 $3,600 $3,400 $3,200 $3,000 $2,800 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 AUM (milions) Markets AUM S&P/TSX Composite S&P500 USD AUM/share Dec 07 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09

7 11/30/2009 Canada ETFs Weekly Trading Volumes Claymore ETFs Trading Volume $250,000,000 $225,000,000 $200,000,000 $175,000,000 $150,000,000 $125,000,000 $100,000,000 $75,000,000 $50,000,000 $25,000,000 $0 7 9/30/2009 7/30/2009 Total Weekly Volume 3 Month Average Volume 3/30/2007 5/30/2007 7/30/2007 9/30/ /30/2007 1/30/2008 3/30/2008 5/30/2008 7/30/2008 9/30/ /30/2008 1/30/2009 3/30/2009 5/30/2009

8 Canada ETF Net Sales Claymore ETF Net Sales by Month $300,000,000 Total Institutional Class Total ETFs $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $ 8 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09

9 Canada ETF breakdown Asset class breakdown Geographical breakdown Commodity 27.3% Large Cap Canadian Equity 15.2% Corporate Bonds 12.2% Emerging Markets Equity 11.3% Government Bonds 9.2% CDN Preferred Shares 8.5% US Equity 8.1% International Equity 5.5% Money Market 1.6% Real Estate 0.7% High Yield Bonds 0.3% Canada Emerging Markets US Asia Developed Europe UK 38.10% 27.78% 17.49% 7.15% 7.12% 2.37% 0% 40% 60% 80% 100% 9

10 Canada ETF Assets by Fund (as of Jan 15/10) ETF Name Ticker AUM % RAFI Claymore Canadian Fundamental Index ETF CRQ $150,358, % Claymore International Fundamental ETF CIE $112,569, % Claymore US Fundamental Index ETF CLU $108,791, % Claymore Japan Fundamental Index ETF C$ Hedged CJP $25,441, % Claymore Emerging Markets Fundamental Index Fund $28,566, % Emerging Markets Equity Claymore BRIC ETF CBQ $346,950, % Claymore Broad Emerging Markets ETF CWO $52,633, % Income Claymore Canadian Financial Monthly Income ETF FIE.A $142,458, % Claymore S&P/TSX Canadian Dividend ETF CDZ $179,580, % Claymore Global Monthly Advantaged Dividend ETF CYH $67,517, % Sector Equity Claymore Global Agriculture ETF COW $275,062, % Claymore S&P Global Water ETF CWW $39,683, % Claymore Equal Weight Banc & Lifeco ETF CEW $94,449, % Claymore S&P/TSX Global Mining ETF CMW $64,682, % Claymore Oil Sands Sector ETF CLO $40,597, % Claymore Global Real Estate ETF CGR $31,131, % Claymore Global Infrastructure ETF CIF $29,364, % Commodity Claymore Natural Gas Commodity ETF GAS $293,003, % Wrap Portfolios Claymore Balanced Income CorePortfolio TM ETF CBD $22,765, % Claymore Balanced Growth CorePortfolio TM ETF CBN $15,553, % Fixed Income Claymore S&P/TSX CDN Preferred Share ET CPD $379,853, % Claymore 1-5 Yr Laddered Government Bond ETF CLF $395,282, % Claymore 1-5 Yr Laddered Corporate Bond ETF CBO $534,532, % Claymore Advantaged Canadian Bond ETF CAB $32,218, % Claymore Advantaged High Yield Bond ETF CHB $14,841, % Money Market Claymore Premium Money Market ETF CMR $72,503, % $3,550,392,252 10

11 YTD Net Creations $2,500 $2,000 Claymore ishares Claymore vs ishares $2,028 $1,856 $1,500 $1,366 $1,000 $500 $0 $770 $717 $1,014 $325 $243 $129 $135 $175 $209 $241 $205 $241 $223 $225 $144 $77 $94 $124 $199 $74 $64 $43 $116 $31 $36 $43 $57 $54 $77 $93 $121 $876 $629 $595 $751 $500 $349 $214 $146 $401 $253 $1,000 $738 Q1 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Sales $ millions Nov 09 Dec 09 $5,500 $5,000 $5, Creations ($ millions) $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $2,039 $1,500 $1,000 $921 $500 $ $164 ishares Claymore HBP BMO 11

12 Claymore vs. Mutual Funds $600 Claymore Top Mutual Fund Companies Average Claymore vs Top Mutual Fund Companies* Sales $ millions $400 $200 $0 $200 $321 $145 $134 $99 $116 $108 $83 $86 $66 $80 $82 $82 $49 $48 $34 $22 $14 $82 $244 $244 $193 $206 $176 $185 $196 $181 $184 $107 $122 $151 $151 $148 $148 $159 $136 $139 $55 $66 $65 $91 $38 $35 $12 $28 $52 $120 $146 $400 $397 $600 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 *Top mutual fund companies include: RBC, BMO, TD, CI Financial, AGF, Fidelity and Dynamic Funds; 12

13 Overview of ETFs and Recent Trends 13

14 ETFs are a Global Phenomenon Market has grown to over US $800B. in assets (over 1600 ETFs) Forecast to hit $2 trillion by 2011 (Morgan Stanley) Products listed in US, Europe, Japan, Canada, Hong Kong, Mexico, Australia, Middle East, India 100+ ETFs now listed on TSX (more to come) ~$35 Billion in AUM Cover full market (equity, fixed income, commodity) 4 providers (ishares, Claymore, HBP, BMO) 14

15 Worldwide ETF Growth Assets USD Billions $2,500 Worldwide ETF Growth # ETFs 2,000 1,800 $2,000 1,600 1,400 $1,500 1,200 1,000 $1, $ $ Q F 2011-F Assets USD Billions $0.8 $1.1 $2.3 $5.3 $8.2 $17.6 $39.6 $74.3 $104.8 $141.6 $212.0 $309.8 $412.1 $565.6 $796.7 $711.0 $933.5 $1,000 $2,000 # ETFs ,171 1,592 1,819 0 Source: Barclays Global Investors, Bloomberg 15

16 Mutual Fund Monthly Net Sales Canadian Mutual Fund Monthly Net Sales ($ billions) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 16

17 Mutual Fund vs ETF Sales Canadian ETF vs Mutual Fund Net Sales for 2008/9 ($ billions) ETFs Mutual Funds Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 17

18 Who s Using ETFs? Originally Institutional product, but retail is where major growth coming ~80% of trading is institutional ~60% of inflows are retail Three main institutional users of ETFs: Pension Funds asset allocation tool, overlay ETF on top of their underlying equity portfolios., replacement/compliment to managers Money Managers use ETFs to equitize cash flows from inflows and redemptions, leveraged/short ETFs. Hedge Funds/Prop Traders - use ETFs to immunize the single security and sector risks embedded in their bets, leveraged/inverse ETFs. 18

19 ETFs Represent a Significant Portion of all Equity Trading: U.S. Percent of ETF Trading of Total Equity Trading 50% 45% 40% 35% 38% 45% 30% 25% 25% 15% 10% 5% 14% 17% 0% YTD US Listed Equities Symbol Average Daily Volume USD$ SPDR S&P 500 ETF SPY $ 24,638,912,000 Powershares QQQ Trust QQQQ $ 4,542,191,000 ishares Russell 2000 Index Fund IWM $ 2,815,981,000 Apple Inc. AAPL $ 2,523,536,000 Financial Select Sector SPDR XLF $ 1,922,946,000 19

20 ETFs Represent a Growing Portion of all Equity Trading: Canada Percent of ETF Trading of Total Equity Trading 15% 15% 10% 8% 5% 2% 3% 5% 0% YTD Canadian Listed Equities Symbol Average Daily Volume CAD$ (2009YTD) ishares CDN S&P/TSX 60 Index Fund XIU $ 279,382,894 Royal Bank of Canada RY $ 235,032,665 Barrick Gold ABX $ 182,754,633 Toronto Dominion Bank TD $ 181,475,396 Potash Corp of Saskatchewan POT $ 175,656,752 20

21 Why Is This Happening? Overall flexibility of ETFs as a Multi-Tool Mutual Funds failed to deliver results Avoidance of single stock risk Tax loss selling Focus on transparency 21

22 Benefits of ETFs Low Cost Tax Efficiency low turnover, in-kind creations Transparency daily holdings Diversification portfolio holdings Flexibility trade intraday, long/short/stop loss/margin/bulk Liquidity unlimited liquidity of portfolio Simple to Use 22

23 Product Cost Matters Asset Class Active Mutual Fund (F-Class) ETF Annual MER Savings Canadian Bonds 0.80% 0.15% % 50-80% Canadian Equity 1.30% % 50-85% U.S. Equity 1.30% 0.30% % 50-75% International Equity 1.50%+ 0.50% % 55-65% Wrap Funds 1.50% % 45-55% 23

24 It s Hard to Consistently Beat the Markets 5 years ending Q Fund Category # of Managers Underperforming Benchmarks over past 5 years # of Managers Outperforming Benchmarks over past 5 years Claymore ETF Canadian Equity 92% 7.6% CRQ Canadian Dividend & Income Equity 100% 0% CDZ U.S. Equity 89% 10.6% CLU (C$ hedged) CLU.C (un-hedged) International Equity 93% 8.1% CIE Source: Standard & Poor s SPIVA Canada Scorecard Mid Year - June 30,

25 Popular Investment Strategies Using ETFs 25

26 Portfolio Strategies using ETFs Core/Satellite Fund or Stock Complement or Replacement Hedging/Listed Options Tax Loss Harvesting Cash Equitization Portfolio Transition Foreign Diversification Strategic and Tactical Asset Allocation 26

27 Asset Allocation as a Portfolio Driver Numerous studies done to determine how much of a multiple asset class portfolio s return due to asset allocation vs. other factors Results show that asset allocation decision is single most important factor in multiple asset portfolio Percentage of Return Explained by Asset Allocation Brinson (1986) Brinson (1991) Ibbotson Mutual Ibbotson Pension Asset Allocation 93.6% 91.5% 81.4% 88.0% Active Return 1.1% 0.08% 0.27% 0.44% 27

28 Efficient Portfolio Development 7 Asset Class Portfolio Construction (Jan 1990 December 2009) PORTFOLIO 1 Canadian Equity Canadian Bonds Global Equity Global Bonds Emerging Equity Real Estate Commodities 50% 50% ASSET CLASS PORTFOLIO 1 Canadian Equity 50% Canadian Bonds Global Equity 50% Global Bonds Emerging Equity Real Estate Commodities TOTAL 100% PERFORMANCE Returns (annualized) 7.27% RISK Standard deviation (annualized) 13.39% RISK ADJUSTED PERFORMANCE Return/Risk ratio 0.54 Maximum Monthly Drawdown % 28

29 Efficient Portfolio Development 7 Asset Class Portfolio Construction (Jan 1990 December 2009) PORTFOLIO 1 PORTFOLIO 2 Canadian Equity Canadian Bonds Global Equity Global Bonds Emerging Equity Real Estate Commodities 50% 50% 30% 30% ASSET CLASS PORTFOLIO 1 PORTFOLIO 2 Canadian Equity 50% 30% Canadian Bonds Global Equity 50% 30% Global Bonds Emerging Equity Real Estate Commodities TOTAL 100% 100% PERFORMANCE Returns (annualized) 7.27% 7.96% RISK Standard deviation (annualized) 13.39% 8.26% RISK ADJUSTED PERFORMANCE Return/Risk ratio Maximum Monthly Drawdown % -8.59% 29

30 Efficient Portfolio Development 7 Asset Class Portfolio Construction (Jan 1990 December 2009) PORTFOLIO 1 PORTFOLIO 2 PORTFOLIO 3 Canadian Equity Canadian Bonds Global Equity Global Bonds Emerging Equity Real Estate Commodities 50% 50% 30% 30% 30% 10% ASSET CLASS PORTFOLIO 1 PORTFOLIO 2 PORTFOLIO 3 Canadian Equity 50% 30% 30% Canadian Bonds Global Equity 50% 30% Global Bonds Emerging Equity 10% Real Estate Commodities TOTAL 100% 100% 100% PERFORMANCE Returns (annualized) 7.27% 7.96% 8.60% RISK Standard deviation (annualized) 13.39% 8.26% 8.65% RISK ADJUSTED PERFORMANCE Return/Risk ratio Maximum Monthly Drawdown % -8.59% -9.37% 30

31 Efficient Portfolio Development 7 Asset Class Portfolio Construction (Jan 1990 December 2009) PORTFOLIO 1 PORTFOLIO 2 PORTFOLIO 3 PORTFOLIO 4 Canadian Equity Canadian Bonds Global Equity Global Bonds Emerging Equity Real Estate Commodities 50% 50% 30% 30% 30% 10% 15% 25% 10% 10% ASSET CLASS PORTFOLIO 1 PORTFOLIO 2 PORTFOLIO 3 PORTFOLIO 4 Canadian Equity 50% 30% 30% 25% Canadian Bonds Global Equity 50% 30% 15% Global Bonds Emerging Equity 10% 10% Real Estate 10% Commodities TOTAL 100% 100% 100% 100% PERFORMANCE Returns (annualized) 7.27% 7.96% 8.60% 8.73% RISK Standard deviation (annualized) 13.39% 8.26% 8.65% 8.14% RISK ADJUSTED PERFORMANCE Return/Risk ratio Maximum Monthly Drawdown % -8.59% -9.37% -8.45% 31

32 Efficient Portfolio Development 7 Asset Class Portfolio Construction (Jan 1990 December 2009) PORTFOLIO 1 PORTFOLIO 2 PORTFOLIO 3 PORTFOLIO 4 PORTFOLIO 5 Canadian Equity Canadian Bonds Global Equity Global Bonds Emerging Equity Real Estate Commodities 50% 50% 30% 30% 30% 10% 15% 25% 10% 10% 15% 10% 7.5% 7.5% ASSET CLASS PORTFOLIO 1 PORTFOLIO 2 PORTFOLIO 3 PORTFOLIO 4 PORTFOLIO 5 Canadian Equity 50% 30% 30% 25% Canadian Bonds Global Equity 50% 30% 15% 15% Global Bonds Emerging Equity 10% 10% 7.5% Real Estate 10% 7.5% Commodities 10% TOTAL 100% 100% 100% 100% 100% PERFORMANCE Returns (annualized) 7.27% 7.96% 8.60% 8.73% 8.40% RISK Standard deviation (annualized) 13.39% 8.26% 8.65% 8.14% 7.36% RISK ADJUSTED PERFORMANCE Return/Risk ratio Maximum Monthly Drawdown % -8.59% -9.37% -8.45% -8.27% 32

33 What if We Used RAFI Instead of Market Cap? RAFI adds significant value by improving return, but more importantly reducing risk Using Market Cap Using RAFI RAFI Benefit Return 8.40% 10.55% 2.15% Standard Deviation 7.37% 6.97% 0.40% Risk Adjusted Return Max Drawdown (Mos) 8.27% 7.00% 1.27% 33

34 Correlations ( ) Canadian Equity Canadian Bonds Global Equity Global Bonds Emerging Markets Global Real Estate Commodities Canadian Equity 1 Canadian Bonds Global Equity Global Bonds Emerging Equity Global Real Estate Commodities

35 But Broadly, Correlations are Still Low Correlations across multiple asset classes remain low Average Correlation Across Asset Classes as of December 31, Month 24 Month 12 Month Dec 92 Dec 93 Dec 94 Dec 95 Dec 96 Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 35

36 Exciting Lineup of Claymore ETFs RAFI FUNDAMENTAL INDEXES Core Canada CRQ Claymore Canadian Fundamental Index ETF Core US CLU Claymore US Fundamental Index ETF - C$ Hedged Core US CLU.C Claymore US Fundamental Index ETF Non-hedged Core International CIE Claymore International Fundamental Index ETF Core Japan CJP Claymore Japan Fundamental Index ETF - C$ Hedged SECTOR / STRATEGY Energy CLO Claymore Oil Sands Sector ETF Global Equity CWW Claymore S&P Global Water ETF Global Equity CMW Claymore S&P/TSX Global Mining ETF Global Equity COW Claymore Global Agriculture ETF Canadian Equity CEW Claymore Equal Weight Banc & Lifeco ETF Global Equity CGR Claymore Global Real Estate ETF Global Equity CIF Claymore Global Infrastructure ETF INTERNATIONAL GROWTH Emerging Markets CBQ Claymore BRIC ETF Emerging Markets CWO Claymore Broad Emerging Markets ETF C$ Hedged 36

37 Exciting Lineup of Claymore ETFs GROWTH & MONTHLY INCOME Large Value CDZ Claymore S&P/TSX Canadian Dividend ETF Global Equity CYH Claymore Global Monthly Advantaged Dividend ETF Canadian Balanced FIE.A Claymore Canadian Financial Monthly Income ETF INCOME / FIXED INCOME Preferred Income CPD Claymore S&P/TSX CDN Preferred Share ETF Fixed Income CLF Claymore 1-5 Yr Laddered Government Bond ETF Fixed Income CBO Claymore 1-5 Yr Laddered Corporate Bond ETF Fixed Income CAB Claymore Advantaged Canadian Bond ETF Fixed Income CHB Claymore Advantaged High Yield Bond ETF Income CMR Claymore Premium Money Market ETF ETF WRAP PROGRAM - CLAYMORE COREPORTFOLIOS SERIES Income CBD Claymore Balanced Income CorePortfolio TM ETF Growth CBN Claymore Balanced Growth CorePortfolio TM ETF COMMODITY Energy GAS Claymore Natural Gas Commodity ETF 37

38 Fundamental versus Market Cap Performance Ticker YTD 3 Month 6 Month 1 Year 3 Year Claymore Canadian Fundamental Index ETF ishares Canadian S&P/TSX 60 Index CRQ 44.28% 2.85% 15.95% 44.28% 1.98% XIU 31.50% 2.52% 11.42% 31.50% 0.18% Difference 12.78% 0.33% 4.53% 12.78% 1.79% Claymore US Fundamental Index ETF ishares Canadian S&P 500 Hedged to CAD Index CLU XSP 28.52% 0.13% 24.55% 28.52% % 22.95% 5.69% 21.27% 22.95% -8.85% Difference 5.57% -5.56% 3.28% 5.57% -1.63% Claymore International Fundamental Index ETF ishares 100% Hedged to CAD Dollars Index Fund CIE XIN 15.59% -4.24% 12.13% 15.59% n/a 18.11% 2.68% 17.42% 18.11% % Difference -2.52% -6.92% -5.29% -2.52% n/a Total Returns, As of 12/31/

39 Fundamental versus Market Cap Performance Claymore Canadian Fundamental Index ETF Ticker YTD 3 Month 6 Month 1 Year 3 Year CRQ 44.28% 2.85% 15.95% 44.28% 1.98% ishares Canadian S&P/TSX 60 Index XIU 31.50% 2.52% 11.42% 31.50% 0.18% Difference 12.78% 0.33% 4.53% 12.78% 1.79% Claymore US Fundamental Index ETF ishares Canadian S&P 500 Hedged to CAD Index CLU XSP 28.52% 0.13% 24.55% 28.52% % 22.95% 5.69% 21.27% 22.95% -8.85% Difference 5.57% -5.56% 3.28% 5.57% -1.63% Claymore International Fundamental Index ETF ishares 100% Hedged to CAD Dollars Index Fund CIE XIN 15.59% -4.24% 12.13% 15.59% n/a 18.11% 2.68% 17.42% 18.11% % Difference -2.52% -6.92% -5.29% -2.52% n/a ishares MSCI EAFE Index Fund ($ CAD) EFA US 9.01% -0.18% 9.67% 9.01% n/a Difference 6.58% -4.06% 2.46% 6.58% n/a Total Returns in $CAD; as of 12/31/

40 Questions? Claymore Investments Inc., Web: Tel: or