Claymore ETF Trust has registered with the Securities and Exchange Commission to launch 10 corporate bond exchange-traded funds that target a range of specific maturities. They are:
• Claymore Corporate Bond 2011 ETF
• Claymore Corporate Bond 2012 ETF
• Claymore Corporate Bond 2013 ETF
• Claymore Corporate Bond 2014 ETF
• Claymore Corporate Bond 2015 ETF
• Claymore Corporate Bond 2016 ETF
• Claymore Corporate Bond 2017 ETF
• Claymore Corporate Bond 2018 ETF
• Claymore Corporate Bond 2019 ETF
• Claymore Corporate Bond 2020 ETF
Each fund will track a rules-based index comprising corporate bonds with effective maturities in a given year—the 2011 Index, the 2012 Index, the 2013 Index and so forth. One criticism of other bond ETFs is that they never mature, making it difficult for people to match up liabilities to bond duration; these funds are designed in part to solve that problem.
The flip side is that, when these funds hit their target date, they will be terminated and the proceeds of the funds distributed to shareholders. So, for instance, bonds making up the Claymore Corporate Bond 2011 ETF portfolio will mature in 2011. At that point, the ETF will shut down and investors will receive cash payouts. Rather than specifying ahead of time a predetermined return at maturity, the fund will, at the time of termination, make cash distribution of its net assets to shareholders.
Every one of these funds will perform in that manner. They will use a representative sampling strategy to replicate their indexes.
You can read the prospectus for the new funds here.