BES Claymore/Bir Leaders Small-Cap Core Etf

Management Discussion of Fund Performance |

BST | Claymore/BIR Leaders 50 ETF

Fund Overview

The Claymore/BIR Leaders 50 ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an index called the BIR Leaders 50 Index (the “BIR-50 Index” or “Index”). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Fund generally will invest in all of the stocks comprising the Index in proportion to their weightings in the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Index is comprised of 50 stocks selected from a universe of common stocks and American depositary receipts (“ADRs”) listed on U.S. exchanges and covered by Best Independent Research, LLC (“BIR” or the “Index Provider”), a consortium of the following five independent research companies: Ativo Research, Channel Trend Inc., Columbine Capital Services, Ford Equity Research, and Thomas White International. The BIR-50 Index is designed to identify companies with potentially superior risk/return profiles to those of stocks contained in the S&P 500 or Russell 3000 ^® indices. The Index constituent selection methodology is a proprietary strategy developed by BIR.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 2, 2007, through August 31, 2007.

On a market price basis, the Fund generated a total return of -1.32%, representing a change in market price to $24.57 on August 31, 2007, from $24.90 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 1.33%, representing a change in NAV to $25.23 on August 31, 2007, from $24.90 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the Index returned 2.16%, and the Standard & Poor’s 500 Index (“S&P 500”) returned 4.26% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains since its inception date of April 2, 2007 through August 31, 2007, were in the industrials sector, followed by the energy sector. The financials sector detracted most from performance; returns from the consumer discretionary and utilities sectors were also negative. Holdings that contributed most to performance include diversified manufacturer Parker Hannifin Corporation, metal components manufacturer Precision Castparts Corporation, and network systems producer Cisco Systems, Inc. (2.6%, 2.8% and 2.4% of total investments, respectively, as of 8/31/07). Positions that detracted from performance include financial services firms Bear Stearns Companies and Capital-Source Inc., toy manufacturer Mattel Inc. and printer manufacturer Lexmark International, Inc. (1.4%, 1.4% and 1.2% of total investments, respectively, as of 8/31/07).

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BMV | Claymore/BIR Leaders Mid-Cap Value ETF

Fund Overview

The Claymore/BIR Leaders Mid-Cap Value ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an index called the BIR Leaders Mid-Cap Value Index (the “Index”). The Fund will normally invest at least 90% of its total assets in common stocks and American depositary receipts (“ADRs”) that comprise the Index. The Fund generally will invest in all of the stocks comprising the Index in proportion to their weightings in the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Index is comprised of approximately 100 stocks selected from a universe of mid-capitalization value common stocks or ADRs listed on U.S. exchanges covered by Best Independent Research, LLC (“BIR” or “Index Provider”), a consortium of the following five independent research companies: Ativo Research, Channel Trend Inc., Columbine Capital Services, Ford Equity Research, and Thomas White International. The mid-capitalization universe is defined by Best Independent Research as those stocks with a market capitalization between approximately $2 billion and $10 billion.

The Index is designed to identify companies with potentially superior risk/return profiles as compared to the stocks contained in mid-cap value benchmark indices such as the Russell MidCap Value Index or the S&P MidCap 400 Index. The Index constituent selection methodology is a proprietary strategy developed by BIR.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 2, 2007, through August 31, 2007.

On a market price basis, the Fund generated a total return of -3.76%, representing a change in market price to $24.03 on August 31, 2007, from $24.97 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of -2.72%, representing a change in NAV to $24.29 on August 31, 2007, from $24.97 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the Index returned -1.83%, and the Standard & Poor’s 500 Index (“S&P 500”) returned 4.26% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains since its inception on April 2, 2007 through August 31, 2007, were in the industrials sector, followed by the telecommunications services sector. The financials and utilities sectors had a negative impact on performance. Holdings that contributed most to performance include engine manufacturer Cummins, Inc., online travel company Expedia, Inc. and telecommunications service provider U. S. Cellular Corp. (1.8%, 1.4% and 1.4% of total investments, respectively, as of 8/31/07). Positions that detracted from performance include The PMI Group, Inc., a provider of credit enhancement products; Convergys Corporation, a provider of outsourced billing and human resource services; and printer manufacturer Lexmark International, Inc. (0.7%, 0.6% and 0.6% of total investments, respectively, as of 8/31/07).

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BES | Claymore/BIR Leaders Small-Cap Core ETF

Fund Overview

The Claymore/BIR Leaders Small-Cap Core ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an index called the BIR Leaders Small-Cap Core Index (the “Index”). The Fund will normally invest at least 90% of its total assets in common stocks and American depositary receipts (“ADRs”) that comprise the Index. The Fund generally will invest in all of the stocks comprising the Index in proportion to their weightings in the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Index is comprised of approximately 150 stocks selected from a universe of small-capitalization core common stocks or ADRs listed on U.S. exchanges covered by Best Independent Research, LLC (“BIR” or the “Index Provider”), a consortium of the following five independent research companies: Ativo Research, Channel Trend Inc., Columbine Capital Services, Ford Equity Research, and Thomas White International. The small-capitalization universe is currently defined by Best Independent Research as those stocks with a market capitalization of under $2 billion. The Index is designed to identify companies with potentially superior risk/return profiles to those of stocks contained in the Russell 2000 ^® Index. The Index constituent selection methodology is a proprietary strategy developed by BIR.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 2, 2007, through August 31, 2007.

On a market price basis, the Fund generated a total return of -2.45%, representing a change in market price to $24.32 on August 31, 2007, from $24.93 at inception. On an NAV basis, the Fund generated a total return of -2.37%, representing a change in NAV to $24.34 on August 31, 2007, from $24.93 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the Index returned -1.56%, and the Standard & Poor’s 500 Index (“S&P 500”) returned 4.26% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains since its inception date on April 2, 2007 through August 31, 2007, were in the industrials and information technology sectors. The sector that detracted most from performance was the financials sector, followed by the consumer discretionary and utilities sectors. Holdings that contributed most to performance include Varian Semiconductor Equipment Associates Inc., a supplier of ion implantation systems; online retailer priceline.com Inc.; and Robbins & Myers Inc., which designs and produces specialized equipment and systems (1.5%, 1.3% and 1.2% of total investments, respectively, as of 8/31/07). Positions that detracted from performance include specialty apparel retailer Charlotte Russe Holding Inc. and two companies involved in financing real estate, RAIT Financial Trust and Luminent Mortgage Capital Inc. (0.5%, 0.2% and 0.2% of total investments, respectively, as of 8/31/07).

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EEB | Claymore/BNY BRIC ETF

Fund Overview

The Claymore/BNY BRIC ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Bank of New York BRIC Select ADR Index (the “BNY BRIC Index” or the “Index”) The Fund will normally invest at least 90% of its total assets in American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The BNY BRIC Index is comprised of ADRs and GDRs selected, based on liquidity, from a universe of all listed depositary receipts of companies from Brazil, Russia, India and China currently trading on U.S. exchanges. The companies in the universe are selected using a proprietary methodology developed by The Bank of New York Mellon (“BNY” or the “Index Provider”). The Index currently consists of 75 securities.

Fund Performance

All Fund returns cited – whether based on net asset value (“NAV”) or market price – assume the reinvestment of all distributions. This report discusses an abbreviated annual fiscal period from the Fund’s inception date of September 21, 2006, through August 31, 2007. The Fund made an annual distribution of $0.0456 per share on December 29, 2006, to shareholders of record on December 27, 2006.

On a market price basis, the Fund generated a total return of 66.02%, representing a change in market price to $40.75 on August 31, 2007, from $24.58 at inception. On an NAV basis, the Fund generated a total return of 65.78%, representing a change in NAV to $40.69 on August 31, 2007, from $24.58 at inception. At the end of the period, the Fund’s shares were trading at a market price premium to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the BNY BRIC Index generated a return of 67.86% and the MSCI Emerging Market Index generated a return of 43.13% for the same period. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. It is not possible to invest directly in an index.

Economic and Market Overview

Economies and stock markets in the BRIC markets – Brazil, Russia, India and China – continued to trend upward during late 2006 and 2007. The Chinese economy was among the strongest in the world, with double-digit growth in gross domestic product over the period covered by this report. Economies in Brazil, Russia and India also expanded over this period. This economic growth was driven by an environment of strong global growth trends, well-contained inflation and expanding demand for goods and services from both emerging markets and developed countries.

Reflecting strong economic growth, the Chinese stock market was up dramatically during the fiscal period ended August 31, 2007. Markets in Brazil, India and Russia were also quite strong over this period. Because currencies of these nations strengthened versus the dollar, returns of the BRIC markets in dollar terms were even stronger than in local currency.

Performance Attribution

Each of the Fund’s 10 industry sectors posted double-digit returns for the period from the Fund’s inception date of September 21, 2006 through August 31, 2007; the strongest was materials, up more than 100%. The telecommunications, financials and energy sectors also made strong contributions to the Fund’s gains. The weakest sectors were health care, industrials and consumer discretionary, all of which have relatively low weights in the Index. Positions in two Brazilian companies and two Chinese companies were among the holdings that made the greatest contributions to performance. The Brazilian positions were metals and mining company Cia Vale do Rio Doce (common stock 4.9%, preferred stock 6.5% of long-term investments as of 8/31/07) and Brazilian oil and gas service company Petroleo Brasileiro S.A. (common stock 5.8%, preferred stock 6.8% of long-term investments as of 8/31/07). Benefiting from rapid growth in the Chinese economy, China Life Insurance Co. Ltd., which offers a variety of insurance products to the Chinese market, and China Mobile Ltd., which provides mobile telecommunications and related services (5.7% and 9.4% of long-term investments, respectively, as of 8/31/07) were particularly strong. Just a few of the Fund’s positions had negative returns. These included Gafisa S.A., a Brazilian home builder, and two Brazilian airlines, TAM S.A. and GOL Linhas Aereas Inteligentes S.A. (0.2%, 0.3% and 0.3% of long-term investments, respectively, as of 8/31/07).

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MCG | Claymore/Clear Mid-Cap Growth Index ETF

Fund Overview

The Claymore/Clear Mid-Cap Growth Index ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an index called the Clear Mid-Cap Growth Index (the “Index”). The Fund will normally invest at least 90% of its total assets in common stock and American depositary receipts (“ADRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Clear Mid-Cap Growth Index is comprised of U.S. common stocks and ADRs of companies that have mid-sized market capitalizations and growth characteristics as defined by Clear Indexes LLC (“Clear”). Market capitalizations typically range between $2 billion and $10 billion. Companies are selected based on a set of investment algorithms proprietary to Clear that evaluate a firm’s fundamental characteristics and valuation. Fundamental characteristics include sales and profit growth along with financial leverage and return on equity. Valuation includes price to earnings and price to earnings to growth metrics. The Index consists of 50 stocks and will rebalance quarterly.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 26, 2007, through August 31, 2007.

On a market price basis, the Fund generated a total return of -1.96%, representing a change in market price to $24.50 on August 31, 2007, from $24.99 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of -2.08%, representing a change in NAV to $24.47 on August 31, 2007, from $24.99 at inception. At the end of the period the Fund’s shares were trading at a market price premium to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Index returned -1.31% and the Standard & Poor’s 500 Index (“S&P 500”) returned -0.70% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The U.S. equity market, as represented by the S&P 500, was down for the period of the Fund’s inception date April 26, 2007, through August 31, 2007. Most international equity markets outperformed the U.S. market, and emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from the inception date of April 26, 2007 through August 31, 2007, were in the energy sector, followed by the industrials sector. Sectors that detracted most from returns were the consumer discretionary and consumer staples sectors. Holdings that contributed most to return included Varian Semiconductor Equipment Associates, Inc., a supplier of ion implantation systems used in the fabrication of semiconductor chips; shoe marketer CROCS, Inc.; and FMC Technologies, Inc., a global provider of technology solutions (2.8%, 2.8% and 2.5% of total investments, respectively, as of 8/31/07). Holdings that detracted from performance include nutritional supplement supplier NBTY, Inc., retailer Office Depot Inc., and footwear retailer Collective Brands, Inc. (1.8%, 1.6% and 1.5% of total investments, respectively, as of 8/31/07).

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CSD | Claymore/Clear Spin-Off ETF

Fund Overview

The Claymore/Clear Spin-Off ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Clear Spin-Off Index (the “Spin-off Index” or the “Index”). The Fund will normally invest at least 90% of its total assets in common stock and American depositary receipts (“ADRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Spin-off Index selection methodology is designed to identify companies with potentially superior risk/return profiles as determined by Clear Indexes LLC, the Index Provider. The Index is designed to actively represent the stock of a group of companies that have recently been spun-off from larger corporations and have the opportunity to better focus on their core market segment and outperform, on a risk-adjusted basis, the Russell Midcap ^® Growth Index and other mid-cap-oriented benchmark indices.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of December 15, 2006, through August 31, 2007.

On a market price basis, the Fund generated a total return of 15.05%, representing a change in market price to $28.97 on August 31, 2007, from $25.18 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 15.25%, representing a change in NAV to $29.02 on August 31, 2007, from $25.18 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the Index returned 15.93% and the Standard & Poor’s 500 Index (“S&P 500”) generated a return of 4.62% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from its inception date of December 15, 2006 through August 31, 2007, were in the materials sector, followed by the consumer discretionary sector. Positions in the information technology, financials and consumer staples sectors detracted from performance. Among the holdings that contributed most to performance were The Mosaic Company, which produces agricultural chemicals (not in the portfolio as of 8/31/07); Discovery Holding Company, a media and entertainment company (5.5% of total investments); and mini-mill steel producer Gerdau AmeriSteel Corp. (not in the portfolio as of 8/31/07). Detractors from performance included Spansion Inc., a producer of Flash memory systems; Western Union Company, a provider of money transfer services; and Fidelity National Financial Inc., a provider of title insurance and other specialty insurance products and services (1.1%, 4.4% and 3.7% of total investments, respectively, as of 8/31/07).

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XGC | Claymore/Great Companies Large-Cap Growth Index ETF

Fund Overview

The Claymore/Great Companies Large-Cap Growth Index ETF

(the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Great Companies Large-Cap Growth Index (the “Large-Cap Index” or “Index”). The Fund will normally invest at least 90% of its total assets in common stocks and American depositary receipts (“ADRs”) that comprise the Index. The Fund generally will invest in all of the stocks comprising the Index in proportion to their weightings in the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Large-Cap Index is composed of between 35 and 50 securities selected using a quantitative methodology developed by Great Companies, Inc. (“Great Companies” or the “Index Provider”) that is based on earnings growth, market price relative to True Worth™ (a proprietary valuation metric of Great Companies that measures implied cash flow returns relative to a stock’s current multiple as well as comparable common stocks at competitive firms), and the traits of “great companies” as detailed in the book Great Companies, Great Returns, by Jim Huguet, published by Random House (1999).

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 2, 2007, through August 31, 2007.

With the market price of the Shares unchanged at $25.02 from the inception date through August 31, 2007, the Fund’s total return on a market basis was 0.00%. On a net asset value (“NAV”) basis, the Fund generated a total return of -0.04%, representing a change in NAV to $25.01 on August 31, 2007, from $25.02 at inception. At the end of the period the Fund’s shares were trading at a market price premium to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Index returned 1.04% and the Standard & Poor’s 500 Index (“S&P 500”) returned 4.26% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s largest gains from the inception date of April 2, 2007 through August 31, 2007, were in the information technology sector, followed by the energy and industrials sectors. The greatest detractors from performance were positions in the consumer discretionary and financials sectors. Holdings that contributed most to performance include Research In Motion Ltd., producer of BlackBerry wireless devices, and two Canadian energy companies, Petro-Canada and Imperial Oil Ltd. (4.0%, 3.3% and 4.8% of total investments, respectively, as of August 31, 2007). Detractors from performance included financial services firms Bear Stearns Cos., Inc. and Lehman Brothers Holdings, Inc. and steel producer Nucor Corporation (1.7%, 2.8% and 3.1% of total investments, respectively, as of August 31, 2007).

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SCV | Claymore/IndexIQ Small Cap-Value ETF

Fund Overview

The Claymore/IndexIQ Small Cap-Value ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the IndexIQ Active Value Small Cap Index (the “Active Value Index” or the “Index”). The Fund will normally invest at least 90% of its total assets in common stock that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index. The Active Value Index is comprised of approximately 100 stocks selected, based on investment and other criteria, from a broad universe of U.S. listed common stocks. The universe of companies includes approximately 1,200 listed companies that have a small-market capitalization ranging from $400 million to $1.5 billion as determined by IndexIQ, Inc. (“IndexIQ” or the “Index Provider”) and other minimum liquidity characteristics.

The Active Value Index selection methodology is designed to identify companies with potentially superior risk-return profiles as determined by IndexIQ. The Index seeks to represent a group of small-capitalization companies that are demonstrating favorable value-oriented characteristics and are reinvesting in themselves to strengthen their future competitive positioning, giving them the potential to outperform, on a risk-adjusted basis, the Russell 2000 ^® Index and other small-cap-oriented benchmark indices. The Index constituent selection methodology utilizes multi-factor proprietary selection rules to identify those stocks that are believed to offer the greatest potential from a risk/return perspective.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 26, 2007, through August 31, 2007.

On a market price basis, the Fund generated a total return of -9.94%, representing a change in market price to $22.73 on August 31, 2007, from $25.24 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of -9.82%, representing a change in NAV to $22.76 on August 31, 2007, from $25.24 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Index returned -9.12% and the Standard & Poor’s 500 Index (“S&P 500”) returned -0.70% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The U.S. equity market, as represented by the S&P 500, was down for the period of the Fund’s inception date April 26, 2007, through August 31, 2007. Most international equity markets outperformed the U.S. market, and emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

During the period from the Fund’s inception date of April 26, 2007 through August 31, 2007, there were declines in the market in which the Fund invests; among the 10 industry sectors into which the Fund’s portfolio is divided, only the industrials sector made a positive contribution to returns. The consumer discretionary and financials sectors detracted most from returns. Holdings that contributed significantly to return included OmniVision Technologies, Inc., which produces semiconductor image sensor devices; Cree, Inc., a technology company that produces components of flat screens; and Cabot Microelectronics Corp., which supplies high-performance polishing slurries used in the manufacture of integrated circuit devices (3.1%, 2.2% and 1.2% of total investments, respectively, as of 8/31/07). Detractors included mortgage insurer Triad Guaranty, Inc., broadcaster Radio One, Inc. and Westwood One, Inc., which provides programming and information services to radio and television stations (0.4%, 0.8% and 0.9% of total investments, respectively, as of 8/31/07).

12 | Annual Report | August 31, 2007

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GRN | Claymore/LGA Green ETF

Fund Overview

The Claymore/LGA Green ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Light Green Eco*Index™ (the “Eco Index” or “Index”). The Fund will normally invest at least 90% of its total assets in common stock and American depositary receipts (“ADRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Eco Index selection methodology is designed to identify companies with the best combination of environmental performance trends in their respective industries as determined by Light Green Advisors (“LGA” or the “Index Provider”). The Index seeks to actively represent a broadly diversified group of liquid major market stocks with representation from all economic sectors that are demonstrable environmental leaders in terms of waste minimization, clean production, pollution and spill prevention, and consistent compliance with environmental laws.

Fund Performance

All Fund returns cited – whether based on net asset value (“NAV”) or market price – assume the reinvestment of all distributions. The Fund’s inception date was December 15, 2006. This report discusses an abbreviated annual fiscal period from the Fund’s inception through August 31, 2007. The Fund made an annual distribution of $0.00311 per share on December 29, 2006, to shareholders of record on December 27, 2006.

On a market price basis, the Fund generated a total return of 2.70%, representing a change in market price to $25.95 on August 31, 2007, from $25.27 at inception. On an NAV basis, the Fund generated a total return of 2.51%, representing a change in NAV to $25.90 on August 31, 2007, from $25.27 at inception. At the end of the period the Fund’s shares were trading at a market price premium to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Eco Index generated a return of 3.40% and the Standard & Poor’s 500 Index (“S&P 500”) generated a return of 4.62% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains since its inception on December 15, 2006 through August 31, 2007, came from the energy, industrials and information technology sectors, all of which posted double-digit gains. Two sectors, the financials and consumer discretionary sectors, had negative returns. Positions that contributed most to return included technology leader Apple Inc. (1.5% of total investments as of 8/31/07), telecommunications giant AT&T Inc. (3.8% of total investments as of 8/31/07) and integrated oil company Exxon Mobil Corp. (not in the portfolio as of 8/31/07). Major detractors from performance were financial services leaders Citigroup Inc. and Goldman Sachs Group Inc. (4.1% and 1.2% of total investments, respectively, as of 8/31/07) and Amgen Inc., a global biotechnology company (0.7% of total investments as of 8/31/07).

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OTR | Claymore/Ocean Tomo Growth Index ETF

Fund Overview

The Claymore/Ocean Tomo Growth Index ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Ocean Tomo 300 ^® Patent Growth Index (the “Index”). The Fund will normally invest at least 90% of its total assets in common stock and American depositary receipts (“ADRs”) that comprise the Index. The Fund generally will invest in all of the stocks comprising the Index in proportion to their weightings in the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Index is comprised of 60 stocks selected, based on investment and other criteria, from a universe of U.S. listed companies. The universe of companies includes the 300 companies that comprise the Ocean Tomo 300 ^® Patent Index without limit on market capitalization, but which are primarily mid-to-large capitalization companies with capitalization in excess of $1 billion. The Ocean Tomo 300 ^® Patent Growth Index selection process is designed to identify six companies in each of ten market capitalization deciles with the highest price-to-book ratio from the universe of companies that are members of the Ocean Tomo 300 ^® Patent Index. The resulting 60 companies form the Index.

The Index constituent selection methodology was developed by Ocean Tomo, LLC (“Ocean Tomo” or the “Index Provider”) as a quantitative approach to selecting stocks in a diversified portfolio from a group of listed equities. The Index member selection model evaluates and selects stocks on the basis of the value of their intellectual property, specifically their patent valuations, using Ocean Tomo’s PatentRatings ^® software, from a universe of U.S.-listed stocks using a proprietary, 100% rules-based methodology developed by Ocean Tomo. The Index constituent selection methodology utilizes multi-factor proprietary selection rules to identify those stocks that offer the greatest potential from a risk/return perspective.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 2, 2007, through August 31, 2007.

On a market price basis, the Fund generated a total return of 9.19%, representing a change in market price to $27.45 on August 31, 2007, from $25.14 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 9.15%, representing a change in NAV to $27.44 on August 31, 2007, from $25.14 at inception. At the end of the period the Fund’s shares were trading at a market price premium to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Index returned 10.12% and the Standard & Poor’s 500 Index (“S&P 500”) returned 4.26% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from the inception date of April 2, 2007 through August 31, 2007, were in the information technology and industrials sectors. The only sector with a negative return was the materials sector. Positions that contributed most to performance included computer maker Apple, Inc., online retailer Amazon.com, Inc. and ABB, Ltd., a Swiss provider of power and automation technologies (6.5%, 2.0% and 3.7% of total investments, respectively, as of 8/31/07). Detractors from performance were Qualcomm, Inc., a producer of digital wireless telecommunications products; pharmaceutical producer GlaxoSmithKline PLC; and Nortel Networks Corp., a global supplier of networking solutions (5.8%, 12.5% and 0.6% of total investments, respectively, as of 8/31/07).

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OTP | Claymore/Ocean Tomo Patent ETF

Fund Overview

The Claymore/Ocean Tomo Patent ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Ocean Tomo 300 ^® Patent Index (the “OceanTomo 300” or “Index”). The OceanTomo 300 is the first publicly-available patent index. The Fund will normally invest at least 90% of its total assets in common stock and American depositary receipts (“ADRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Index selection methodology is designed to identify six companies within each of 50 style and size groups (which include value, relative value, blend, growth at a reasonable price (GARP) and growth by decile) with the highest patent value to book value ratio as determined by OceanTomo, LLC (the “Index Provider”) using OceanTomo’s Patent Ratings™ software. The Index is designed to actively represent a group of stocks that own quality patent portfolios.

Fund Performance

All Fund returns cited – whether based on net asset value (“NAV”) or market price – assume the reinvestment of all distributions. This report discusses an abbreviated annual fiscal period from the Fund’s inception date of December 15, 2006, through August 31, 2007. The Fund made an annual distribution of $0.00285 per share on December 29, 2006, to shareholders of record on December 27, 2006.

On a market price basis, the Fund generated a total return of 9.47%, representing a change in market price to $27.66 on August 31, 2007, from $25.27 at inception. On an NAV basis, the Fund generated a total return of 10.50%, representing a change in NAV to $27.92 on August 31, 2007, from $25.27 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Ocean-Tomo 300 Index returned 11.31% and the Standard & Poor’s 500 Index (“S&P 500”) returned of 4.62% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

From the Fund’s inception date of December 15, 2006 through August 31, 2007, nine of the 10 industry sectors in the portfolio had positive returns; the Fund’s strongest gains came from the information technology and industrials sectors. Only the financials sector detracted from performance. Positions that made the strongest contributions to performance included mobile phone manufacturer Nokia OYJ, integrated oil company Exxon Mobil Corp., technology leader Apple Inc. and telecommunications giant AT&T Inc. (1.6%, 6.2%, 1.5% and 3.1% of total investments, respectively, as of 8/31/07). Detractors from performance were Amgen Inc., a global biotechnology firm, software company Microsoft Corp. and auto company Toyota Motor Corp. (0.7%, 3.5% and 2.7% of total investments, respectively, as of 8/31/07).

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DEF | Claymore/Sabrient Defender ETF

Fund Overview

The Claymore/Sabrient Defender ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Sabrient Defensive Equity Index (the “Defensive Equity Index” or “Index”). The Fund will normally invest at least 90% of its total assets in common stock and American depositary receipts (“ADRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Defensive Equity Index selection methodology is designed to identify companies with potentially superior risk/return profiles, as determined by Sabrient Systems, LLC (“Sabrient” or the “Index Provider”), during periods of weakness in the markets and/or the American economy overall. The Index is designed to actively represent a group of stocks that reflect occurrences such as low relative valuations, conservative accounting, dividend payments and a history of out-performance during bearish market periods. The Index constituents represent a “defensive” portfolio with the potential to outperform the S&P 500 Index and other broad market benchmark indices on a risk-adjusted basis during periods of market weakness, while still providing the potential for positive returns during strong market periods.

Fund Performance

All Fund returns cited – whether based on net asset value (“NAV”) or market price – assume the reinvestment of all distributions. This report discusses an abbreviated annual fiscal period from the Fund’s inception date of December 15, 2006, through August 31, 2007. The Fund made an annual distribution of $0.00556 per share on December 29, 2006, to shareholders of record on December 27, 2006.

On a market price basis, the Fund generated a total return of 4.89%, representing a change in market price to $26.29 on August 31, 2007, from $25.07 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 5.09%, representing a change in NAV to $26.34 on August 31, 2007, from $25.07 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the Sabrient Defensive Equity Index returned 5.68% and the Standard & Poor’s 500 Index (“S&P 500”) generated a return of 4.62% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from the inception date of December 15, 2006 through August 31, 2007, came in the telecommunications, materials and consumer staples sectors. Positioning in the financials and information technology sectors detracted from performance. Among the top contributors were Alcan, Inc., a Canadian aluminum and mining company (1.0% of total investments as of 8/31/07); Dade Behring Holdings, Inc., a manufacturer and distributor of diagnostic products (1.0% of total investments as of 8/31/07); international energy company Norsk Hydro ASA (not in the portfolio as of 8/31/07); and BCE, Inc., a Canadian communications company (1.0% of total investments as of 8/31/07). The three main detractors from performance were in the financials sector: insurance underwriter Old Republic International Corp. (1.0% of total investments as of 8/31/07); Liberty Property Trust, a real estate investment trust (not in the portfolio as of 8/31/07); and American Financial Group Inc., an insurance holding company (not in the portfolio as of 8/31/07).

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NFO | Claymore/Sabrient Insider ETF

Fund Overview

The Claymore/Sabrient Insider ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Sabrient Insider Sentiment Index (the “Insider Sentiment Index” or “Index”). The Fund normally will invest in at least 90% of its total assets in common stocks and American depositary receipts (“ADRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Insider Sentiment Index selection methodology is designed to identify companies with potentially superior risk-return profiles as determined by Sabrient Systems, LLC (“Sabrient” or the “Index Provider”). The objective of the Index is to actively represent a group of stocks that are reflecting favorable corporate insider buying trends (determined via the public filings of such corporate insiders) and Wall Street analyst earnings estimate increases, giving them the potential to outperform the S&P 500 Index and other broad market benchmark indices on a risk-adjusted basis.

Fund Performance

All Fund returns cited – whether based on net asset value (“NAV”) or market price – assume the reinvestment of all distributions. This report discusses an abbreviated annual fiscal period from the Fund’s inception date of September 21, 2006, through August 31, 2007. The Fund made an annual distribution of $0.038 per share on December 29, 2006, to shareholders of record on December 27, 2006.

On a market price basis, the Fund generated a total return of 17.31%, representing a change in market price to $29.45 on August 31, 2007, from $25.14 at inception. On an NAV basis, the Fund generated a total return of 17.43%, representing a change in NAV to $29.48 on August 31, 2007, from $25.14 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Sabrient Insider Index returned 18.31% and the Standard & Poor’s 500 Index (“S&P 500”) returned 13.79% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from the inception date of September 21, 2006 through August 31, 2007, came from the industrials and energy sectors. Positions in the financials and telecommunication services sectors detracted from returns. Holdings that contributed most to performance were Blue Coat Systems, Inc., which provides internet security systems to businesses; SunPower Corporation, which produces solar power products and services; and crude oil refiner Western Refining, Inc. (2.0%, 1.3% and 1.1% of total investments, respectively, as of 8/31/07). Holdings that detracted from performance include bank holding company Corus Bankshares, Inc. (0.8% of total investments); Rackable Systems, Inc., which produces computer servers and storage systems (not in the portfolio as of 8/31/07); Silicon Image, Inc., which develops semiconductor devices for digital content delivery (not in the portfolio as of 8/31/07); and Rogers Corp., a producer of polymer components for technology applications (not in the portfolio as of 8/31/07).

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STH | Claymore/Sabrient Stealth ETF

Fund Overview

The Claymore/Sabrient Stealth ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Sabrient Stealth Index (the “Stealth Index” or “Index”). The Fund will normally invest at least 90% of its total assets in common stock and American depositary receipts (“ADRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Stealth Index selection methodology is designed to identify companies with potentially superior risk-return profiles as determined by Sabrient Systems, LLC (“Sabrient” or the “Index Provider”). The objective of the Index is to actively represent a group of stocks that are “flying under the radar screen” of Wall Street’s analysts, but which have displayed robust growth characteristics that give them the potential to outperform, on a risk-adjusted basis, the Russell 2000 ^® Small Cap Index and other small-cap-oriented benchmark indices.

Fund Performance

All Fund returns cited – whether based on net asset value (“NAV”) or market price – assume the reinvestment of all distributions. This report discusses an abbreviated annual fiscal period from the Fund’s inception date of September 21, 2006, through August 31, 2007. The Fund made an annual distribution of $0.0711 per share on December 29, 2006, to shareholders of record on December 27, 2006.

On a market price basis, the Fund generated a total return of 4.36%, representing a change in market price to $26.18 on August 31, 2007, from $25.15 at inception. On an NAV basis, the Fund generated a total return of 4.64%, representing a change in NAV to $26.25 on August 31, 2007, from $25.15 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Sabrient Stealth Index returned 5.66% and the Standard & Poor’s 500 Index (“S&P 500”) returned 13.79% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from its inception date of September 21, 2006 through August 31, 2007, came in the materials sector, followed by the energy sector. Positions in the utilities and telecommunication services sectors detracted from performance. Holdings that contributed most to performance include GrafTech International Ltd., which produces graphite products (not in the portfolio as of 8/31/07); Imergent, Inc., which provides e-commerce technology to small businesses (not in the portfolio as of 8/31/07); financial services firm U.S. Global Investors Inc. (1.2% of total investments, as of 8/31/07); and Bolt Technology Corp., which produces geophysical equipment and industrial products (not in the portfolio as of 8/31/07). Holdings that detracted from performance include Coleman Cable, Inc., which produces electrical wire and cable products (0.7% of total investments, as of 8/31/07); Radian Group, Inc., a global credit enhancement company (0.4% of total investments, as of 8/31/07); and real estate and distribution company AMREP Corporation (not in the portfolio as of 8/31/07).

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CZG | Claymore/Zacks Growth & Income Index ETF

Fund Overview

The Claymore/Zacks Growth & Income Index ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Zacks Growth & Income Index (the “Index”). The Index is comprised of 225 stocks selected, based on investment and other criteria, from a universe of the 1,500 most liquid U.S. listed equity securities. The Fund will normally invest at least 90% of its total assets in common stocks and American depositary receipts (“ADRs”) that comprise the Index. The Fund generally will invest in all of the stocks comprising the Index in proportion to their weightings in the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Zacks Growth & Income Index selection methodology is designed to identify securities with potentially high income, long-term growth potential and superior risk-return profiles as determined by Zacks Investment Research, Inc. (“Zacks or the “Index Provider”). The Index is designed to select a diversified group of stocks with the potential to outperform, on a risk-adjusted basis, the Russell ^® 1000 Index and other benchmark indices.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 2, 2007, through August 31, 2007.

On a market price basis, the Fund generated a total return of -2.51%, representing a change in market price to $24.45 on August 31, 2007, from $25.08 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 0.92%, representing a change in NAV to $25.31 on August 31, 2007, from $25.08 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the Index returned 1.91%, and the Standard & Poor’s 500 Index (“S&P 500”) returned 4.26% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from the Fund’s inception date of April 2, 2007 through August 31, 2007, were in the industrials sector, followed by the information technology sector. The financials, utilities and consumer staples sectors were detractors from returns. Holdings that contributed most to performance include Southern Copper Corp., an integrated producer of copper, molybdenum, zinc and silver (0.6% of total investments as of 8/31/07); shoe marketer Crocs, Inc. (not in the portfolio as of 8/31/07); and aQuantive, Inc., a digital marketing company that was acquired by Microsoft Corporation. (Neither aQuantive nor Microsoft is held in the portfolio as of 8/31/07.) Positions that detracted from performance include Heelys, Inc., which markets wheeled footwear and sport-inspired accessories (0.1% of total investments as of 8/31/07); Jones Soda Co., a marketer of alternative beverages (not in the portfolio as of 8/31/07); and specialty finance company KKR Financial Holdings LLC (0.5% of total investments as of 8/31/07).

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CZA | Claymore/Zacks Mid-Cap Core ETF

Fund Overview

The Claymore/Zacks Mid-Cap Core ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an index called the Zacks Mid-Cap Core Index (the “Index”). The Index is comprised of 100 stocks selected, based on investment and other criteria, from a universe of mid-capitalization common stocks and American depositary receipts (“ADRs”). Currently, the mid-capitalization universe ranges from approximately $2 billion in market capitalization to $10 billion in market capitalization as defined by Zacks Investment Research, Inc. (“Zacks or the “Index Provider”). The securities in the universe are selected using a proprietary strategy developed by Zacks. The Fund will normally invest at least 90% of its total assets in securities that comprise the Index. The Fund generally will invest in all of the stocks comprising the Index in proportion to their weightings in the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Zacks Mid-Cap Core Index selection methodology is designed to identify securities with potentially superior risk-return profiles as determined by Zacks. The Index seeks to select a group of stocks with the potential to outperform the Russell MidCap Index, the S&P MidCap 400 Index and other benchmark indices on a risk-adjusted basis.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of April 2, 2007, through August 31, 2007.

On a market price basis, the Fund generated a total return of 1.99%, representing a change in market price to $25.59 on August 31, 2007, from $25.09 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 1.64%, representing a change in NAV to $25.50 on August 31, 2007, from $25.09 at inception. At the end of the period the Fund’s shares were trading at a market price premium to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the Index returned 2.34%, and the Standard & Poor’s 500 Index (“S&P 500”) returned 4.26% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from the inception date of April 2, 2007 through August 31, 2007, were in the industrials sector. Other sectors with positive returns were the materials, health care and consumer staples sectors. The financials, energy and information technology sectors were the greatest detractors from returns. Holdings that contributed most to performance include CNH Global N.V., a Dutch manufacturer of agricultural and construction equipment; Textron, Inc., a global multi-industry company; and Cooper Industries, Inc., which produces electrical products and tools (none of these stocks were in the portfolio as of 8/31/07). Positions that detracted from performance include printer R.R. Donnelley & Sons Company; employment services firm Manpower, Inc.; and finance company CIT Group, Inc. (1.5%, 1.2% and 1.4% of total investments, respectively, as of 8/31/07).

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XRO | Claymore/Zacks Sector Rotation ETF

Fund Overview

The Claymore/Zacks Sector Rotation ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Zacks Sector Rotation Index (the “Index”). The Fund will normally invest at least 90% of its total assets in common stocks and American depositary receipts (“ADRs”) that comprise the Index. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index. The Index uses a proprietary quantitative methodology developed by Zacks Investment Research, Inc. to overweight (as compared to other benchmark indices) sectors with potentially superior risk-return profiles. The objective of the Index is to overweight those sectors that combined have the potential to outperform, on a risk-adjusted basis, the S&P 500 Index and other benchmark indices.

Fund Performance

All Fund returns cited – whether based on net asset value (“NAV”) or market price – assume the reinvestment of all distributions. This report discusses an abbreviated annual fiscal period from the Fund’s inception date of September 21, 2006, through August 31, 2007. The Fund made an annual distribution of $0.0374 per share on December 29, 2006, to shareholders of record on December 27, 2006.

On a market price basis, the Fund generated a total return of 18.69%, representing a change in market price to $29.61 on August 31, 2007, from $24.98 at inception. On an NAV basis, the Fund generated a total return of 18.41%, representing a change in NAV to $29.54 on August 31, 2007, from $24.98 at inception. At the end of the period the Fund’s shares were trading at a market price premium to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the shares should not be sustained.

For index and broad market comparison purposes, the Index returned 18.79% and the Standard & Poor’s 500 Index (“S&P 500”) returned 13.79% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

The Fund’s strongest gains from the inception date of September 21, 2006 through August 31, 2007, were in the financials and materials sectors. While all sectors made positive contributions to return, the consumer staples sector contributed least. Holdings that contributed most to performance include China Life Insurance Co. Ltd. (2.4% of total investments as of 8/31/07); farm equipment manufacturer Deere & Co. (2.0%, of total investments as of 8/31/07); and Southern Copper Corp., an integrated producer of copper, molybdenum, zinc and silver (not held in the portfolio as of 8/31/07). Positions that detracted from performance include ENSCO International Inc., an international offshore contract drilling company (1.0% of total investments as of 8/31/07); pharmaceutical producer Forest Laboratories Inc. (not held in the portfolio as of 8/31/07); and NYSE Euronext, a liquid exchange group offering a diverse array of financial products and services (1.4% of total investments as of 8/31/07).

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CVY | Claymore/Zacks Yield Hog ETF

Fund Overview

The Claymore/Zacks Yield Hog ETF (the “Fund”) seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Zacks Yield Hog Index (the “Index”). The Fund will normally invest at least 90% of its total assets in common stocks and American depositary receipts (“ADRs”) that comprise the Index. The Fund expects to use a sampling approach in seeking to achieve its objective. Sampling means that quantitative analysis is used to select stocks from the Index universe to obtain a representative sample of stocks that resemble the Index in terms of key risk factors, performance attributes and other characteristics. However, the Fund may use replication to achieve its objective if practicable. Claymore Advisors, LLC, the Fund’s investment adviser (the “Investment Adviser”), seeks a correlation over time of 95% or better between the Fund’s performance and the performance of the Index.

The Zacks Yield Hog Index selection methodology is designed to identify companies with potentially high income and superior risk-return profiles as determined by Zacks Investment Research, Inc. (“Zacks or the “Index Provider”). The objective of the Index is to select a diversified group of securities with the potential to have a yield in excess of and outperform on a risk-adjusted basis the Dow Jones US Select Dividend Index and other benchmark indices.

Fund Performance

This report discusses an abbreviated annual fiscal period from the Fund’s inception date of September 21, 2006, through August 31, 2007.

On a market price basis, the Fund generated a total return of 8.50%, representing a change in market price to $26.10 on August 31, 2007, from $24.96 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 8.67%, representing a change in NAV to $26.14 on August 31, 2007, from $24.96 at inception. At the end of the period the Fund’s shares were trading at a market price discount to NAV, which is to be expected from time to time. However, the Investment Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.

For index and broad market comparison purposes, the Index returned 10.25%, and the Standard & Poor’s 500 Index (“S&P 500”) returned 13.79% for the same period. The S&P 500 is generally representative of the U.S. stock market. It is an unmanaged, capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries. It is not possible to invest directly in an index.

Economic and Market Overview

Economic reports have been mixed during 2007, but have been generally supportive of continued moderate growth in the U.S. economy. The corporate sector remained in relatively strong financial condition, and most international economies have continued to expand. A correction in the housing market, driven in part by issues in the sub-prime mortgage sector, created concern that this weakness may spill over to the broader economy. Recent employment reports indicate that the labor market may be weakening. To date, however, both consumer spending and corporate investment have remained fairly strong.

The fiscal period ended August 31, 2007, was generally positive for the U.S. equity market, and nearly all major indices produced gains. Most international equity markets outperformed the U.S. market as represented by the S&P 500. Emerging markets were particularly strong. In recent months, investors have demonstrated reduced appetites for risk; the result has been wider credit spreads in the bond market and increased volatility in equity markets.

Performance Attribution

Nine of the Fund’s 10 industry sectors made positive contributions to performance from the Fund’s inception date of September 21, 2006 through August 31, 2007; the one exception was the financials sector. The Fund’s strongest gains were in the energy and materials sectors. Holdings that contributed most to performance include Southern Copper Corp., an integrated producer of copper, molybdenum, zinc and silver (1.3% of long-term investments); Tele Norte Leste Participacoes SA, a Brazilian provider of telecommunications services(not held in the portfolio as of 8/31/07); and Lyondell Chemical Co., a chemical producer and oil refiner (not held in the portfolio as of 8/31/07). Positions that detracted from performance include RAIT Financial Trust (0.3% of long-term investments), NovaStar Financial Inc. (not held in the portfolio as of 8/31/07), and New Century Financial Corp. (not held in the portfolio as of 8/31/07), all of which are involved in financing real estate.

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Risks and Other Considerations

The views expressed in this report reflect those of the portfolio manager and Claymore only through the report period as stated on the cover. These views are subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any kind. The material may also contain forward looking statements that involve risk and uncertainty, and there is no guarantee they will come to pass.

This information does not represent an offer to sell securities of the Funds and it is not soliciting an offer to buy securities of the Funds. There can be no assurance that the Funds will achieve their investment objectives.

An investment in the Funds is subject to certain risks and other considerations that include, but are not limited to:

Investment Risk. This includes the risk of the possible loss of the entire principal amount that you invest.

Equity Risk. This includes the risk that the value of the securities held by the Funds will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Funds participate, or factors relating to specific companies in which the Funds invest.

Replication Management Risk. Unlike many investment companies, the Funds are not “actively” managed. Therefore, the Funds won’t necessarily sell a stock because the stock’s issuer was in financial trouble unless that stock is removed from the Index.

Non-Correlation Risk. The Funds’ returns may not match the returns of the indices. For example, the Funds incur operating expenses not applicable to the indices, and incur costs in buying and selling securities, especially when rebalancing the Funds’ holdings to reflect changes in the composition of the indices.

Issuer-Specific Changes Risk. Investments in non-U.S. issuers may involve unique risks, including, among others, greater market volatility than U.S. securities and less complete financial information than for U.S. issuers.

Non-Diversified Fund Risk. The Funds are considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.

Micro-, Small- and Medium-Sized Company Risk. Investing in securities of micro-cap, small- and medium-sized companies involves greater risk than investing in more established companies. These companies’ stocks may be more volatile and less liquid than those of more established companies.

Foreign Investment Risk. The Fund’s investments in non-U.S. issuers, although limited to ADRs, may involve unique risks compared to investing in securities of U.S. issuers, including, among others, greater market volatility than U.S. securities and less complete financial information than for U.S. issuers. In addition, adverse political, economic or social developments could undermine the value of the Funds’ investments or prevent the Funds from realizing the full value of their investments. Financial reporting standards for companies based in foreign markets differ from those in the United States. Finally the value of the currency of the country in which the Fund has invested could decline relative to the value of the U.S. dollar, which may affect the value of the investment to U.S. investors. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, are under no obligation to distribute shareholder communications to the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities.

Emerging Markets Risk. Investing in foreign countries, particularly emerging market countries, entails the risk that news and events unique to a country or region will affect those markets and their issuers. Countries with emerging markets may have relatively unstable governments, may present the risks of nationalization of businesses, restrictions on foreign ownership and prohibitions on the repatriation of assets.

Industry Risk. While the Funds do not concentrate in any industry, to the extent that the Funds’ focus their investments in a particular industry or group of related industries, the NAV of the Funds will be more susceptible to factors affecting that industry or sector.

There can be no assurance that the requirements of the AMEX necessary to maintain the listing of the Funds will continue to be met or will remain unchanged.

The Claymore/BNY BRIC ETF is also subject to risks incurred by investing in companies that are located in Brazil, Russia, India and China. Brazil has experienced substantial economic instability resulting from, among other things, periods of very high inflation, persistent structural public sector deficits and significant devaluations of the currency of Brazil, which have led to a high degree of price volatility in both the Brazilian equity and foreign currency markets. Investing in securities of Russian companies involves additional risks, including, among others, the absence of developed legal structures governing private or foreign investments and private property; the possibility of the loss of all or a substantial portion of the Fund’s assets invested in Russia as a result of expropriation. Investing in securities of Indian companies involves additional risks, including, but not limited to, greater price volatility, substantially less liquidity and significantly smaller market capitalization of securities markets, more substantial governmental involvement in the economy, higher rates of inflation and greater political, economic and social uncertainty. Investing in securities of Chinese companies involves additional risks, including, but not limited to: the economy of China differs, often unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. As an investor in such companies, the Fund is indirectly subject to those risks.

The Claymore/Zacks Yield Hog ETF is also subject to risks incurred by investing in preferred stocks—some that may be rated below investment grade, REITs, master limited partnerships and other investment companies.

The Claymore/Zacks Sector Rotation ETF is also subject to various sector risks and portfolio turnover risks.

The Claymore/Ocean Tomo Patent ETF and the Claymore/Ocean Tomo Growth Index ETF are also subject to patent risk meaning that the companies in which they invest (via the Index) can be significantly affected by patent considerations, including the termination of their patent protection for their products.

In addition to the risks described, there are certain other risks related to investing in the Funds. These risks are described further in the Prospectus and Statement of Additional Information.