Claymore Investments, Inc. has completed the initial public offering of 40 million units for the Claymore Gold Bullion Trust, the company announced on Thursday.

The offering of units at $10 per unit raised gross proceeds of $400 million. Each unit is comprised of one transferable and redeemable trust unit and one warrant, which is exercisable to acquire an additional fund unit for $10.00 at any time before Nov. 28.

The fund units and warrants commenced trading on Thursday on the Toronto Stock Exchange under the symbols CGL.UN and CGL.WT, respectively.

The fund has granted the agents an over-allotment option to purchase up to 6 million additional units at any time during the next 30 days.

The fund’s investment objective is to replicate the performance of the price of gold bullion, less the fund’s expenses and fees. To achieve this, the fund will invest the net proceeds of the offering in holdings of physical gold bullion.

Since gold bullion is priced in U.S. dollars, the fund will hedge substantially all of the fund’s U.S. dollar currency value back to the Canadian dollar to reduce the currency risk for Canadian investors.

The fund features a management fee of 0.5% of the net asset value of the fund, which includes all fees, operating expenses and custodian fees, other than certain compliance fees, taxes and extraordinary expenses.

The fund will automatically convert into an exchange-traded fund if the fund units trade at a discount to net asset value after six months.

The offering was made through a syndicate of investment dealers led by GMP Securities L.P. and TD Securities Inc., and including Genuity Capital Markets, Canaccord Capital Corp., Dundee Securities Corp., Richardson Partners Financial Ltd., Scotia Capital Inc., Blackmont Capital Inc., Desjardins Securities Inc., Haywood Securities Inc., Burgeonvest Securities Limited, FirstEnergy Capital Corp., HSBC Securities (Canada) Inc., Research Capital Corp., Rothenberg Capital Management Inc. and Wellington West Capital Markets Inc.

IE