Guggenheim To Change Index On SEA

June 07, 2011

SEA will get a new index that seems to have a much smaller U.S. allocation.

Guggenheim Funds, the company behind the BulletShares target maturity date corporate bond ETFs, filed paperwork with the Securities and Exchange Commission to change the index on its Guggenheim Shipping ETF (NYSEArca: SEA). The change appears to cut U.S. weighting in the fund by 80 percent.

The ETF, which is currently based on the Delta Global Shipping Index, will be organized around the Dow Jones Global Shipping Index once the change takes place, according to the filing. It said the change will become effective 60 days after the filing, “pursuant to paragraph (A)(1) of Rule 485.” The Guggenheim filing was dated May 27.

The proposed new Delta Global Shipping Index weighted U.S. companies at 36.3 percent as of March 3, while the Dow Jones Global Shipping Index had a U.S. weighting of 7.8 percent as of April 30. While the new index can have shipping companies located around the world—including in the emerging markets— the new benchmark index also weights certain Asian countries more than the existing index.

For example, Japan’s weighting in the new index was 27.5 percent compared with 10.8 percent in the current index. Also, Singapore’s and Hong Kong’s weightings were at around 11 percent and 13 percent, respectively, in the new index. That compares with 7.2 percent and 7.6 percent, respectively, in the existing index.

The market capitalizations of the 25 stocks included in the index as of April 30 ranged from $400 million to $9.7 billion, including micro-, small-, mid- and large-capitalization stocks as defined by the benchmark provider, according to the filing.

The fund has almost $12 million in assets, according to data compiled by IndexUniverse.


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