DCS
Claymore Dividend & Income Fund
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COMMON SHARES
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DAILY DATA as of
3/15/10
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Closing Share Price
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$13.78
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Closing NAV
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$16.30
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Premium/(Discount)
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(15.46%)
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Current Distribution Rate1
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2.90%
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Quarterly Dividend Per Share 2
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$0.10000
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52-Week Average Premium/Discount
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(13.56%)
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Tax-Advantaged Distribution Rate3
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3.59%
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Daily Volume
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45,211
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Ex-Dividend Date
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2/10/10
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Payable Date
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2/26/10
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52 Week High/Low Share Price4
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$15.96/$6.55
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52 Week High/Low NAV4
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$16.67/$8.75
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Intraday Trading Information
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NYSE
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Data subject to change on a daily basis.
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WEEKLY DATA as of
3/12/10
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Closing Share Price
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$13.75
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Closing NAV
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$16.28
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Closing Volume
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56,354
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Premium/(Discount)
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(15.54%)
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Distribution Rate
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2.91%
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Total Managed Assets
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$114,302,173
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Shares Outstanding
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4,993,991
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Percent Leveraged
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28.87%
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Data subject to change on a daily basis.
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SEMI-ANNUAL DATA as of
10/31/09
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Fiscal Year-End
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10/31
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Expense Ratio (Total Fund)5
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1.64%
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Expense Ratio (Common Shares)5
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2.77%
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Portfolio Turnover Rate6
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172%
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Portfolio Manager
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Manning & Napier Advisors, Inc.
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Investment Adviser
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Claymore Advisors
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Data subject to change on a daily basis.
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FUND INFORMATION
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Common Shares
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Inception Date
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January 27, 2004
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NYSE Symbol
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DCS
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NAV Symbol
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XDCSX
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The Wall Street Journal Listing
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ClayDivIncoFd
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CUSIP
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18385J105
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Inception Share Price7
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$100.00
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Inception NAV7
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$95.50
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FINANCIAL LEVERAGE as of
3/12/10
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Leverage Outstanding
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$33,000,000
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1940 Act Asset Coverage Ratio
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346%
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QUARTERLY TOTAL RETURNS
as of 12/31/09
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MARKET PRICE
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NAV
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2009 YTD
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78.01 %
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32.38 %
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1 Year
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78.01 %
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32.38 %
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3 Year
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-44.27 %
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-45.76 %
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5 Year
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-24.74 %
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-26.86 %
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Since Inception
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-21.43 %
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-21.29 %
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Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Since Inception returns assume a purchase of common shares at the initial offering price of $100.00 per share for market price returns or initial net asset value (NAV) of $95.50 per share for NAV returns. Returns for periods of less than one year are not annualized. All distributions are assumed to be reinvested either in accordance with the dividend reinvestment plan (DRIP) for market price returns or NAV for NAV returns. Until the DRIP price is available from the Plan Agent, the market price returns reflect the reinvestment at the closing market price on the last business day of the month. Once the DRIP is available around mid-month, the market price returns are updated to reflect reinvestment at the DRIP price.
Historical data has been adjusted to reflect a 1-for-5 reverse stock split as of the close of business on June 4, 2009.
If new tax legislation is not enacted, the taxation rates on qualifying dividend income and long-term capital gains will revert to the pre-2003 Tax Act rates in 2011. Taxation rates on taxable bond interest income, non-qualifying dividend income and short-term capital gains are scheduled to revert to the pre-2001 rates in 2011. Please consult your tax advisor for further information as it pertains to the potential tax advantages and implications of this Fund.
1
Latest declared quarterly dividend per share annualized and divided by the current share price. To the extent any portion of the current distribution is estimated to be sourced from something other than income, such as return of capital, the source would be disclosed on a Section 19a-1 letter located under the “Fund News” section of the “News & Literature” section of the Fund’s website. The distribution rate may include net investment income, capital gains and/or return of capital. The distribution rate alone is not indicative of Fund performance.
2
Dividend per share is subject to change on the ex-dividend date. The distribution amount may include net investment income, capital gains and/or return of capital. The distribution amount alone is not indicative of Fund performance.
3
“Tax-Advantaged Distribution Rate” is calculated based upon the 35% federal income tax bracket and assumes the 2009 tax characterization of dividends whereby 100.00% of distributions are ordinary income (of which 77.11% are qualified dividend income generally taxed at the maximum 15% long-term capital gains rate).There can be no assurance that this characterization is indicative of future allocations nor that this distribution rate will be achieved in the future.
The Fund cannot assure investors as to what percentage of the dividends paid on the common shares, if any, will consist of qualified dividend income or long-term capital gains, both of which are taxed at lower rates for individuals than are ordinary income and short-term capital gains. It is important to note that common shareholders must meet the holding period requirements, as it pertains to qualified dividend income, as set forth by the Jobs and Growth Tax Relief Reconciliation Act of 2003, to be consistent with the tax-advantaged distribution rate shown herein.
4
Figures are based on market close.
5
Annualized. Common Share Expense Ratio includes fee waiver of 0.09%, Total Fund Expense Ratio includes fee waiver of 0.06%
6
Not Annualized
7
Historical data has been adjusted to reflect a 1-for-5 reverse stock split as of the close of business on June 4, 2009.
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INVESTMENT OBJECTIVE
The Fund's primary investment objective is to provide a high level of current income, with a secondary objective of capital appreciation. The Fund will pursue its investment objectives by investing its assets primarily in dividend-paying common and preferred stocks. There can be no assurance that the Fund will achieve its investment objectives.
Under normal market conditions, the Fund will invest at least 80% of its total assets in dividend-paying or other income-producing securities, and at least 65% of the Fund's total assets will consist of investments in dividend-paying common and preferred stocks. The Fund may invest up to 40% of its total assets in U.S. dollar-denominated securities of foreign issuers. Such investments in securities of foreign issuers may include investments in American Depositary Receipts, or "ADRs." There is no minimum credit rating for preferred stocks and debt securities in which the Fund may invest, although the Fund will not invest more than 10% of its total assets in non-convertible fixed-income securities of below investment-grade quality, which are commonly referred to as "junk bonds."
For periodic shareholder reports and recent fund-specific filings, please visit the U.S. Securities and Exchange Commission (“SEC”) website via the following link, click here.
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FREQUENTLY ASKED QUESTIONS
How can I obtain the schedule of securities that were distributed during the Fund’s in-kind tender offer?
To view a list of securities that were distributed during the Fund’s in-kind tender offer please view the press release that was disseminated on January 19, 2010. This press release can be found within the “News + Literature” section on the Fund’s website.
Describe the differences between closed-end and open-end funds?
An open-ended fund may be purchased or sold at NAV. An open-end fund will issue new shares when an investor wants to purchases shares in the fund and will sell assets to redeem shares when an investor wants to sell shares. When selling an open-ended fund the price the seller receives is established at the close of the market when the NAV is calculated. Unlike the open-end fund, a closed-end fund has a limited number of shares outstanding and trades on an exchange at the market price based on supply and demand. An investor may purchase or sell shares at market price while the exchange is open. The common shares may trade at a discount or premium to the NAV.
Why a Leveraged Fund?
Leveraged closed-end funds offer investors the opportunity to purchase shares of a fund whose dividend yields generally are designed to be higher than those of similar, unleveraged investments. At the same time, leverage introduces or heightens certain investment risks. As a result, understanding leverage, its benefits and risks, plays an important role in determining whether a leveraged Fund is the right investment. Leverage creates risks that may adversely affect the return for the holders of common shares, including: the likelihood of greater volatility of NAV and market price of the Fund’s common shares, fluctuations in the dividend rates, and possible increased operating costs, which may reduce the Fund’s total return.
What does the "Ex-Div" or the "Ex-Dividend" date refer to?
Every quarter the Fund pays dividends and those investors who purchase the Fund before the ex-dividend date will receive the next dividend distribution. Investors who purchase on or after the ex-dividend date will not receive the next dividend distribution. The value of the dividend is subtracted from the Fund's NAV on the ex-dividend date each quarter. So when the NAV is reported with an "ex-div" behind it, this means that the amount of the dividend has already been taken out of the NAV.
What is the DRIP and how does it work?
DRIP is the Dividend Reinvestment Plan. The number of shares of common stock distributed to participants in the Plan in lieu of a cash dividend is determined in the following manner. Whenever the market price per share of the Fund’s common stock is equal to or exceeds the net asset value per share on the valuation date, participants in the Plan will be issued new shares valued at the higher of net asset value or 95% of the then-current market value. Otherwise, the Administrator will buy shares of the common stock in the open market, on the NYSE or elsewhere.
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DCS FUND MANAGER
Manning & Napier Advisors, Inc. has been a registered investment advisor since 1970. For more than 35 years, Manning & Napier has focused on managing clients' investments through a variety of market conditions, including five bear markets. The firm manages assets for individuals, corporations, defined benefit pension plans, 401(k) choice plans, Taft-Hartley accounts, endowments, foundations and municipal retirement plans. It remains an employee-owned firm, with 100% of the firm owned by full-time employees.
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INVESTMENT TEAM
Portfolio Management
Christian Andreach | Managing Director - Consumer Group
Christian, an employee-owner, is responsible for analyzing investment opportunities within the Consumer sector. Prior to joining Manning & Napier in 1999, he worked as a financial analyst for Proctor & Gamble Co. Christian earned his BBA from St. Bonaventure University, received his MBA from the University of Rochester and holds the distinction of Chartered Financial Analyst.
Jack W. Bauer | Managing Director - Fixed Income Group
Jack, an employee-owner, is responsible for the oversight of the Firm’s Fixed Income Group. Prior to joining Manning & Napier in 1990, he worked as a Fixed Income Portfolio Manager at Chase Manhattan Bank and as an Industry Economist with the Federal Government’s Department of Energy. Jack earned his BS in Mathematics from St. John Fisher College, his MA in Economics from Georgetown University and his MBA from the University of Rochester.
Jeffrey S. Coons | Co-Director of Research, Managing Director - Quantitative Strategies Group, Executive Group Member
Jeff has a broad responsibility for the management of the Firm’s Research Department. He is an employee-owner and has over 20 years of experience at Manning & Napier. Jeff received his BA in Economics from the University of Rochester, earned his PhD in Economics from Temple University and holds the distinction of Chartered Financial Analyst.
Jeffrey Donlon | Managing Director – Technology
Jeff, an employee-owner, is responsible for analyzing investment opportunities within the Technology sector. Prior to joining Manning & Napier in 1998, he worked as an associate with the Industrial Bank of Japan Trust Company. Jeff earned his BS in Finance from Canisius College, received his MBA from Duke University and holds the distinction of Chartered Financial Analyst.
Brian Gambill | Managing Director - Capital Goods and Equipment Group
Brian, an employee-owner, is responsible for analyzing investment opportunities within the Capital Goods & Equipment sectors, with a special emphasis on the Energy sector. Prior to joining Manning & Napier in 1997, he worked as an analyst for the Montana Board of Investments. Brian earned his BS in Finance and Economics from Montana State University and holds the distinction of Chartered Financial Analyst.
R. Keith Harwood | Senior Fixed Income Analyst
Keith is responsible for analyzing investment opportunities within Corporate Fixed Income investments. Keith earned his BA in Economics from St. John Fisher. He joined Manning & Napier in 1997 and has held his current position since 1998.
Jeffrey Herrmann | Co-Director of Research, Managing Director - Themes and Overviews Group, Executive Group Member
Jeff has a broad responsibility for the management of the Firm’s Research Department. Jeff is responsible for monitoring long-term themes, trends and overviews to improve our ability to take advantage of the opportunities offered by the market going forward. He is an employee-owner and has been with the firm for over 20 years. Jeff earned dual BS degrees in Chemistry and Finance from Clarkson University and holds the distinction of Chartered Financial Analyst.
Brian Lester | Managing Director - Life Sciences Group
Brian, an employee-owner, is responsible for analyzing investment opportunities within the Health Care sector. Prior to joining Manning & Napier in 1998 he worked at The Sutherland Group as a research assistant. Brian earned his BS in Agriculture, Resource and Managerial Economics from Cornell University and holds the distinction of Chartered Financial Analyst.
Michael Magiera | Managing Director - Real Estate Group
Mike is responsible for coverage of REITS and Real Estate related investments. Mike is an employee-owner and has 20 years of experience at Manning & Napier. Mike earned his BBA in Finance from St. Bonaventure University, received his MBA from the University of Rochester and holds the distinction of Chartered Financial Analyst.
Christopher Petrosino | Senior Analyst, Quantitative Strategies Group
Christopher joined Manning & Napier in 2001 and is responsible for providing top-down quantitative research to the firm’s global sector group analysts. He earned his BA in Economics and Statistics from the University of Rochester and MS in Statistics from the Rochester Institute of Technology. Christopher also holds the distinction of Chartered Financial Analyst.
Marc D. Tommasi | Managing Director - Global Strategies Group
Marc is responsible for macroeconomic overviews by country on a global basis. Marc is an employee-owner and has over 20 years of experience at Manning & Napier. Marc earned his BA in Economics and Political Science from the University of Rochester.
Virge Trotter | Managing Director - Services Group
Virge, an employee-owner, is responsible for analyzing investment opportunities within the Financial, Utilities and Media sectors. Prior to joining Manning & Napier in 1997, he was Vice President at Thomas White Asset Management in Chicago. Virge earned his BS in Electrical Engineering from Iowa State University, his MBA in Finance from the University of Chicago, and holds the distinction of Chartered Financial Analyst.
DCS Investment Manager
Manning & Napier Advisors, Inc.
290 Woodcliff Drive
Fairport NY, 14450
If you would like to view the Investment Manager's website, you may click on the link below.
It is important to note that by clicking on the link, you will be leaving this website
and any information viewed there is not the property of Claymore Securities, Inc.
www.manningnapieradvisors.com
Manning & Napier Advisors, Inc. has entered into an investment sub-advisory agreement with Claymore and the Fund.
For further information, please click here.
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RISKS AND OTHER CONSIDERATIONS
There can be no assurance that the Fund will achieve its investment objectives. The value of the Fund will fluctuate with the value of the underlying securities. Historically, closed-end funds often trade at a discount to their net asset value. Risk is inherent in all investing, including the loss of your entire principal. Therefore, before investing you should consider the following risks carefully.
Not a Complete Investment Program. The Fund is intended for investors seeking a high level of current income and capital appreciation over the long term. The Fund is not meant to provide a vehicle for those who wish to play short-term swings in the stock market. An investment in the Common Shares of the Fund should not be considered a complete investment program. Each Common Shareholder should take into account the Fund’s investment objectives as well as the Common Shareholder’s other investments when considering an investment in the Fund.
Equity Risk. Substantially all of the Fund’s assets will be invested in common stocks and preferred equity securities, and therefore a principal risk of investing in the Fund is equity risk. Equity risk is the risk that securities held by the Fund will fall due to general market or economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, and the particular circumstances and performance of particular companies whose securities the Fund holds. For example, an adverse event, such as an unfavorable earnings report, may depress the value of equity securities of an issuer held by the Fund; the price of common stock of an issuer may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the common stocks and other equity securities held by the Fund. In addition, common stock of an issuer in the Fund’s portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition. Common equity securities in which the Fund will invest are structurally subordinated to preferred stocks, bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater dividend risk than preferred stocks or debt instruments of such issuers. In addition, while broad market measures of commons stocks have historically generated higher average returns than fixed income securities, common stocks have also experienced significantly more volatility in those returns.
Preferred Securities Risk. There are special risks associated with investing in preferred securities, including: Deferral. Preferred securities may include provisions that permit the issuer, at its discretion, to defer distributions for a stated period without any adverse consequences to the issuer. If the Fund owns a preferred security that is deferring its distributions, the Fund may be required to report income for tax purposes although it has not yet received such income. Non-Cumulative Dividends. Some preferred stocks are non-cumulative, meaning that the dividends do not accumulate and need not ever be paid. A portion of the portfolio may include investments in non-cumulative preferred securities, whereby the issuer does not have an obligation to make up any arrearages to its shareholders. Should an issuer of a non-cumulative preferred stock held by the Fund determine not to pay dividends on such stock, the amount of dividends the Fund pays may be adversely affected. There is no assurance that dividends or distributions on non-cumulative preferred stocks in which the Fund invests will be declared or otherwise made payable. Subordination. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than more senior debt instruments. Liquidity. Preferred securities may be substantially less liquid than many other securities, such as common stocks or U.S. government securities. Limited Voting Rights. Generally, preferred security holders (such as the Fund) have no voting rights with respect to the issuing company unless preferred dividends have been in arrears for a specified number of periods, at which time the preferred security holders may have the right to elect a number of directors to the issuer’s board. Generally, once all the arrearages have been paid, the preferred security holders no longer have voting rights. Special Redemption Rights. In certain varying circumstances, an issuer of preferred securities may redeem the securities prior to a specified date. For instance, for certain types of preferred securities, a redemption may be triggered by a change in federal income tax or securities laws. As with call provisions, a redemption by the issuer may negatively impact the return of the security held by the Fund.
Income Risk. The income Common Shareholders receive from the Fund is based primarily on the dividends and interest it earns from its investments, which can vary widely over the short- and long term. If prevailing market interest rates drop, distribution rates of the Fund’s portfolio holdings of preferred securities and debt securities may decline which then may adversely affect the Fund’s distributions on Common Shares as well. The Fund’s income also would likely be affected adversely when prevailing short-term interest rates increase and the Fund is utilizing Financial Leverage.
"Value Investing" Risk. The Fund focuses its investments on dividend paying or other income producing securities that the Investment Manager believes are undervalued or inexpensive relative to other investments. These types of securities may present risks in addition to the general risks associated with investing in securities. These securities generally are selected on the basis of an issuer’s fundamentals relative to current market price. Such securities are subject to the risk of misestimation of certain fundamental factors. In addition, during certain time periods market dynamics may strongly favor ‘‘growth’’ securities of issuers that do not display strong fundamentals relative to market price based upon positive price momentum and other factors. Disciplined adherence to a ‘‘value’’ investment mandate during such periods can result in significant underperformance relative to overall market indices and other managed investment vehicles that pursue growth style investments and/or flexible style mandates.
Interest Rate Risk. Interest rate risk is the risk that fixed income securities such as preferred and debt securities will decline in value because of changes in market interest rates. When market interest rates rise, the market value of such securities generally will fall. The Fund’s investment in such securities means that the net asset value and market price of the Common Shares will tend to decline if market interest rates rise. During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal earlier than scheduled, forcing the Fund to reinvest in lower yielding securities. This is known as call or prepayment risk. Preferred and debt securities frequently have call features that allow the issuer to repurchase the security prior to its stated maturity. An issuer may redeem such a security if the issuer can refinance it at a lower cost due to declining interest rates or an improvement in the credit standing of the issuer. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security’s duration and reduce the value of the
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Investors should carefully consider the investment objectives and policies, risk considerations, charges and ongoing expenses of any investment
product before investing. For more information, please contact a securities representative or Claymore Securities, Inc., 2455 Corporate West Drive,
Lisle, Illinois 60532, 800-345-7999.
NOT FDIC-INSURED | NOT BANK-GUARANTEED | MAY LOSE VALUE
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