Claymore Investments Inc. announced on Friday that Adjustable Rate MBS Trust (ADJ) unitholders have approved a proposal to merge the trust with Claymore Global Monthly Advantaged Dividend ETF (CYH), which is to take effect on or about July 2.
The merger will provide unitholders of ADJ the opportunity to invest in a fund that will have a larger market capitalization, increased liquidity and a lower management expense ratio. CYH is an ETF that provides its unitholders with exposure to the performance of the Zacks global multi-asset income index, a proprietary index designed to identify companies with potentially high income and superior risk-return profiles while maintaining industry diversification.
As with ADJ, distributions made by CYH are expected to consist primarily of capital gains and returns of capital and are intended to be tax efficient when compared to units of a trust that depends solely on interest, dividend and/or other investment income to pay distributions.
As part of the implementation of the merger, all of ADJ’s net assets will be transferred to CYH in consideration for advisor class units of CYH, based on an exchange ratio to be determined by reference to the relative net asset values of the units of ADJ and CYH.
Immediately following the transfer of ADJ’s assets to CYH and the issuance of CYH advisor class units to ADJ, all remaining units of ADJ will be automatically redeemed and each unitholder of ADJ will receive CYH advisor class units equal to the number of units of ADJ multiplied by the exchange ratio.
Unitholders also approved an extension to the scheduled annual redemption period of ADJ to June 30 from June 1 in order to allow ADJ unitholders who do not wish to participate in the merger an opportunity to redeem for cash.
Claymore unitholders approve fund merger
Merged fund to have larger market cap, increased liquidity and a lower MER
- By: IE Staff
- June 7, 2009 June 7, 2009
- 12:04