(NYSE: DCS) Claymore Dividend & Income Fund (the “Fund”)
announces that the Fund’s Board of Trustees has approved the
appointment of a new investment sub-adviser to the Fund: Guggenheim
Partners Asset Management, LLC (“GPAM”), an affiliate of Guggenheim
Funds Investment Advisors, LLC (“GFIA”), the Fund’s investment
adviser. GPAM will begin serving as investment sub-adviser as of
May 16, 2011. The Fund will continue to seek its primary investment
objective of seeking a high level of current income with a
secondary objective of capital appreciation, but will seek to
achieve such investment objective by utilizing an enhanced equity
option strategy developed by GPAM. The Fund anticipates that this
investment strategy may increase the income and gains earned by the
Fund, which may result in an increase in the amount of quarterly
distributions payable by the Fund beginning in August 2011 to an
annualized range of 7% to 8%, based on current market conditions.
No assurance can be given that such a distribution rate will be
achieved and the Fund’s actual distribution rate may be above or
below the range stated herein. In connection with the appointment
of GPAM, GFIA has agreed to extend the waiver of a portion of the
advisory fees payable by the Fund.
Change in Investment Sub-Adviser
The Fund’s Board of Trustees has approved the appointment of
GPAM as the Fund’s investment sub-adviser, effective as of May 16,
2011. At such time, Manning & Napier Advisors, Inc. (“M&N”)
will cease to serve as investment sub-adviser to the Fund and GPAM
will enter into an interim investment sub-advisory agreement (the
“Interim Sub-Advisory Agreement”) with GFIA and the Fund, which
will be in effect for an interim period of up to 150 days. The
Board of Trustees also approved a new sub-advisory agreement among
the Fund, GFIA and GPAM (the “New Sub-Advisory Agreement”), to be
effective upon approval by shareholders, and intends to submit the
New Sub-Advisory Agreement to shareholders for approval at the 2011
annual meeting of shareholders of the Fund. Proxy materials for the
annual meeting will contain information regarding the New
Sub-Advisory Agreement and GPAM. Each of GFIA and GPAM is an
indirect subsidiary of Guggenheim Partners, LLC (“Guggenheim”), a
diversified financial services firm.
Name and Ticker Change
In connection with the appointment of GPAM as investment
sub-adviser, the name of the Fund will change to Guggenheim
Enhanced Equity Strategy Fund. The name change will be effective on
or about May 16, 2011. At such time, the Fund anticipates that the
Fund’s NYSE ticker symbol will change to “GGE” and the Fund’s CUSIP
will also change.
Fee Waiver
Under the investment advisory agreement between the Fund and
GFIA, GFIA is entitled to receive an investment advisory fee at an
annual rate equal to 0.85% of the average daily value of the Fund’s
total managed assets. GFIA previously agreed to a 0.08% fee waiver
due to expire on June 17, 2011. Beginning upon the expiration of
the current fee waiver and for so long as the investment
sub-adviser of the Fund is an affiliate of GFIA, GFIA has agreed to
waive 0.05% of its advisory fee, such that the Fund will pay to
GFIA an investment advisory fee at an annual rate equal to 0.80% of
the average daily value of the Fund’s total managed assets. GFIA
will pay a portion of the advisory fee to GPAM as investment
sub-adviser. GFIA has agreed to reimburse certain fees and expenses
of the Fund associated with the appointment of GPAM.
Investment Strategy
The Fund will continue to seek its primary investment objective
of seeking a high level of current income with a secondary
objective of capital appreciation. The Fund currently seeks to
achieve its investment objective by investing primarily in a
portfolio of equity securities selected by M&N. After GPAM
becomes the investment sub-adviser, GPAM will manage the Fund
utilizing an enhanced equity option strategy developed by GPAM.
GPAM will seek to achieve the Fund's investment objective by
obtaining broadly diversified exposure to the equity markets and
utilizing a covered call strategy which follows GPAM's proprietary
dynamic rules-based methodology to seek to utilize efficiencies
from the tax characteristics of the Fund's portfolio. The Fund may
seek to obtain exposure to equity markets through investments in
exchange-traded funds or other investment funds that track equity
market indices, through investments in individual equity securities
and/or through derivative instruments that replicate the economic
characteristics of exposure to equity securities or markets. In
current market conditions, GPAM initially expects to seek to obtain
exposure to equity markets by investing primarily in
exchange-traded funds. The Fund will have the ability to write call
options on indices and/or securities which will typically be at- or
out-of-the money. GPAM's strategy typically targets one-month
options, although options of any strike price or maturity may be
utilized. The Fund will seek to earn income and gains both from
dividends paid on securities owned by the Fund and cash premiums
received from selling options. Although the Fund will receive
premiums from the options written, by writing a covered call
option, the Fund forgoes any potential increase in value of the
underlying securities above the strike price specified in an option
contract through the expiration date of the option. To the extent
GPAM's strategy seeks to achieve broad equity exposure through a
portfolio of common stocks, the Fund would hold a diversified
portfolio of stocks. To the extent GPAM's equity exposure strategy
is implemented through investment in broad-based equity
exchange-traded funds or other investment funds or derivative
instruments that replicate the economic characteristics of exposure
to equity securities markets, the Fund's portfolio is expected to
comprise fewer holdings. The Fund will ordinarily focus its
investments in securities of U.S. issuers but may invest up to 15%
of its total assets in U.S. dollar-denominated securities of
foreign issuers. The Fund may invest in or seek exposure to equity
securities of issuers of any market capitalization.
Changes to Non-Fundamental Investment Policies
In connection with the appointment of GPAM the Board of Trustees
has approved changes to certain non-fundamental investment policies
of the Fund. Such changes will become effective as of May 16,
2011.
It will no longer be an investment policy of the Fund, under
normal market conditions, to invest at least 80% of its total
assets in dividend-paying or other income-producing securities. Nor
will it be an investment policy of the Fund, under normal market
conditions, to invest at least 65% of the Fund's total assets in
dividend-paying common and preferred stocks.
Instead, the Fund has adopted a non-fundamental investment
policy of, under normal market conditions, investing at least 80%
of its net assets, plus the amount of any borrowings for investment
purposes, in equity securities. Once this policy becomes effective,
it may be changed by the Board, but no change is anticipated. If
such policy changes, the Fund will provide shareholders at least 60
days' written notice before implementation of the change.
In addition, it will no longer be an investment policy of the
Fund to invest up to 10% of the Fund's total assets in securities
of other open- or closed-end investment companies that invest
primarily in securities of the types in which the Fund may invest
directly. Instead, the Fund will be able to invest without
limitation in securities of other open- or closed-end investment
companies, including exchange-traded funds. In current market
conditions, GPAM initially expects to seek to obtain exposure to
equity markets by investing primarily in exchange-traded funds.
Investments in exchange-traded funds and other investment funds
which invest at least 80% of their assets in equity securities or
have investment objectives or strategies of tracking equity market
indices will be included as investments in equity securities for
the purpose of the Fund’s investment policy of investing at least
80% of its assets in equity securities.
The Fund is required to provide shareholders 60 days’ written
notice of a change to its current non-fundamental policy with
respect to investing in dividend-paying or other income-producing
securities. Accordingly, a notice describing the changes discussed
above will be mailed to shareholders of record as of March 8, 2011.
No action is required by shareholders of the Fund in connection
with this change.
Summary of Certain Additional Risk Factors
As a result of the changes in the Fund’s investment strategy
described above, the Fund will be subject to certain additional
risk factors.
There are several risks associated with transactions in options
used in connection with the Fund’s option strategy. A decision as
to whether, when and how to use options involves the exercise of
skill and judgment, and even a well conceived transaction may be
unsuccessful to some degree because of market behavior or
unexpected events. As the writer of a covered call option, the Fund
forgoes, during the option’s life, the opportunity to profit from
increases in the market value of the security covering the call
option above the sum of the premium and the strike price of the
call, but has retained the risk of loss should the price of the
underlying security decline. The Fund’s successful use of options
on indices depends upon its ability to predict the direction of the
market and is subject to various additional risks. There can be no
assurance that a liquid market will exist when the Fund seeks to
close out an option position on an options exchange. If the Fund
were unable to close out a covered call option that it had written
on a security, it would not be able to sell the underlying security
unless the option expired without exercise.
As a stockholder in an investment company, the Fund will bear
its ratable share of that investment company's expenses, and would
remain subject to payment of the Fund's investment management fees
with respect to the assets so invested. Shareholders would
therefore be subject to duplicative expenses to the extent the Fund
invests in other investment companies. To the extent the Fund
invests in exchange-traded funds or other investment companies that
seek to track a specified index, such investments will be subject
to tracking error risk.
GPAM
GPAM is an investment manager specializing in innovative
investment strategies that aim to add incremental returns relative
to benchmarks in both up and down markets. GPAM's investment
philosophy is predicated upon the belief that thorough research and
independent thought are rewarded with performance that has the
potential to outperform benchmark indices with both lower
volatility and lower correlation of returns over time as compared
to such benchmark indices.
Guggenheim Funds
GFIA and its affiliates (“Guggenheim Funds”) offer strategic
investment solutions for financial advisors and their valued
clients. As an innovator in exchange-traded funds (ETFs), unit
investment trusts (UITs) and closed-end funds (CEFs), Guggenheim
Funds often leads its peers with creative investment strategy
solutions. Guggenheim Funds provides supervision, management or
servicing of assets with a commitment to consistently delivering
exceptional service.
Guggenheim Funds and GPAM are indirect subsidiaries of
Guggenheim Partners, LLC, a global, diversified financial services
firm with more than $100 billion in assets under management and
supervision. Guggenheim, through its affiliates, provides
investment management, investment advisory, insurance, investment
banking, and capital markets services. The firm is headquartered in
Chicago and New York with a global network of offices throughout
the United States, Europe, and Asia.
This information does not represent an offer to sell securities
of the Fund and it is not soliciting an offer to buy securities of
the Fund. There can be no assurance that the Fund will achieve its
investment objective. The net asset value of the Fund will
fluctuate with the value of the underlying securities. It is
important to note that closed-end funds trade on their market
value, not net asset value, and closed-end funds often trade at a
discount to their net asset value. Past performance is not
indicative of future performance.
Forward Looking Statements
This press release may contain forward-looking statements,
within the meaning of the federal securities laws. These statements
describe the Fund’s plans, strategies, and goals and the Fund’s
beliefs and assumptions concerning future economic and other
conditions and the outlook for the Fund. Words such as
“anticipates,” “believes,” “expects,” “objectives,” “goals,”
“future,” “intends,” “seeks,” “will,” “may,” “could,” “should,” and
similar expressions are used to identify forward-looking
statements, although some forward-looking statements may be
expressed differently.
The Fund cautions that forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over
time. Forward-looking statements speak only as of the date they are
made, based on currently available information, and the Fund
assumes no duty to and does not undertake to update forward-looking
statements. Actual results could differ materially from those
anticipated in forward-looking statements and future results could
differ materially from historical performance.
Investors should consider the investment objectives and
policies, risk considerations, charges and expenses of any
investment before they invest. For this and more information,
please contact a securities representative or Guggenheim Funds
Distributors, Inc., 2455 Corporate West Drive, Lisle, Illinois
60532, 800-345-7999.
Member FINRA/SIPC (3/11)
NOT FDIC-INSURED | NOT BANK-GUARANTEED | MAY
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