BES Claymore/Bir Leaders Small-Cap Core Etf

Management Discussion of Fund Performance

LVL | Claymore/BBD High Income Index ETF

The Claymore/ BBD High 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 Benchmarks By Design High Income Index (the “BBD High Income Index” or “Index”). The Fund will normally invest at least 90% of its total assets in securities 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 total return of the Index less any expenses or distributions. A figure of 1.00 would represent perfect correlation.

The BBD High Income Index is comprised of approximately 110 to 150 securities selected, based on investment and other criteria, from a universe of:

The securities in the universe are selected using a proprietary methodology developed by Benchmarks by Design (the “Index Provider”).

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 semi-annual fiscal period from the Fund’s inception date of June 25, 2007, through November 30, 2007.

On a market price basis, the Fund generated a total return of -14.55%, representing a change in market price to $20.83 on November 30, 2007, from $24.98 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of -14.60%, representing a change in NAV to $20.82 on November 30, 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. The Fund paid monthly distributions of $0.135 per share in each month beginning in August 2007.

For index and broad market comparison purposes, the Index returned -14.67% and the Standard & Poor’s 500 Index (“S&P 500”) returned -0.60% 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

The period from the Fund’s inception date of June 25, 2007, through November 30, 2007, was a difficult environment for investors in both equity and fixed income, as concerns have mounted about the widening impact of the sub-prime mortgage crisis on the markets and the economy as a whole. Equity markets have been highly volatile, with no pronounced trend that defines the entire period. In the fixed income market, spreads between credits of the highest quality and riskier instruments have widened dramatically, as investors have become increasingly intolerant of risk.

The U.S. economy continued to expand at a moderate pace during 2007, despite a variety of concerns. Consumer spending has held up reasonably well, and labor market trends remain fairly positive. Business investment and corporate earnings continued to grow. Expansion in net exports, supported by economic growth abroad and the weak dollar, contributed to growth in the U.S., cushioning the impact of the housing correction. Beginning in September, the Fed reduced interest rates three times, as it strives to strike a balance between providing needed support for financial markets and keeping inflation at a moderate level.

Performance Attribution

A pronounced concentration in the financial sector was detrimental to the Fund’s performance, both on an absolute basis and relative to the S&P 500, as this was the worst performing of the 10 sectors in the S&P 500 over this period. Within the financial sector, exposure to the mortgage sector hurt performance. Holdings that declined included Thornburg Mortgage Inc., Deerfield Triarc Capital Corp. and KKR Financial Holdings LLC (1.4%, 1.3% and 1.2% of total investments, respectively). The sector that was most positive for performance was industrials; holdings that performed well include Quintana Maritime Ltd. and Diana Shipping Inc. (1.1% and 1.1% of total investments, respectively), both of which provide marine transportation services.

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KSF | Claymore/KLD Sudan Free Large-Cap Core ETF

The Claymore/KLD Sudan Free Large-Cap Core 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 KLD Large Cap Sudan Free Social ^SM Index (the “KLD Index” or “Index”). The Index is based on the KLD Large Cap Social ^SM Index (“LCSI”), which is comprised of a subset of stocks in the Russell 1000 ^® Index with market capitalizations generally greater than $1 billion and that meet KLD Research & Analytics Inc.’s (“KLD” or the “Index Provider”) screens for environmental, social and governance (“ESG”) factors. For the Index, KLD then removes all LCSI holdings with certain types of business involvement in Sudan.

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. A figure of 1.00 would represent perfect correlation.

Fund Performance

This report discusses an abbreviated semi-annual fiscal period from the Fund’s inception date of June 25, 2007, through November 30, 2007.

On a market price basis, the Fund generated a total return of -2.13%, representing a change in market price to $24.32 on November 30, 2007, from $24.85 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of -1.37%, representing a change in NAV to $24.51 on November 30, 2007, from $24.85 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 -0.76% and the Standard & Poor’s 500 Index (“S&P 500”) returned -0.60% 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

The period from the Fund’s inception date of June 25, 2007, through November 30, 2007, was a difficult environment for investors, as concerns mounted about the widening impact of the sub-prime mortgage crisis on the markets and the economy as a whole. Equity markets were highly volatile, with no pronounced trend that defines the entire period.

The U.S. economy continued to expand at a moderate pace during 2007, despite a variety of concerns. Consumer spending held up reasonably well, and labor market trends remain fairly positive. Business investment and corporate earnings continued to grow. Expansion in net exports, supported by economic growth abroad and the weak dollar, contributed to growth in the U.S., cushioning the impact of the housing correction. Beginning in September, the Federal Reserve (“the Fed”) reduced interest rates three times, striving to strike a balance between providing needed support for financial markets and keeping inflation at a moderate level.

Performance Attribution

For the period from the Fund’s inception date of June 25, 2007, through November 30, 2007, the Fund posted positive returns in five of the 10 industry sectors into which the S&P 500 is divided and negative returns in five sectors. The information technology sector made the strongest contribution to return; the financial and consumer discretionary sectors were the greatest detractors from performance. In the information technology sector, positions that contributed most to return included Apple Inc., Google Inc. and Microsoft Corp. (1.8%, 1.8% and 3.1% of total investments, respectively), all of which reported strong earnings. Among the greatest detractors were Merrill Lynch & Co. Inc, Washington Mutual Inc. and Freddie Mac (0.6%, 0.2% and 0.3% of total investments, respectively), all of which have exposure to problems in the subprime mortgage market, and Home Depot Inc. (0.5% of total investments), which has been hurt by a slump in the housing market and concerns about consumer spending.

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MZN | Claymore/Morningstar Information Super Sector Index ETF

The Claymore/Morningstar Information Super Sector 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 Morningstar Information Super Sector Index (the “Information Super Sector Index” or “Index”). Claymore Advisors, LLC (the “Investment Adviser”) seeks a correlation over time of 0.95 or better between the Fund’s performance and the performance of the Index. A figure of 1.00 would represent perfect correlation.

The Fund, using a low cost “passive” or “indexing” investment approach, will seek to replicate, before expenses, the performance of the Information Super Sector Index. The Index is designed to identify and track companies in industries that support and facilitate the exchange of ideas and information as a basis for commerce. Eligible Index securities include the total investable universe of the software, hardware, media and telecommunications sectors. Morningstar Inc. (“Morningstar” or the “Index Provider”) classifies companies into the industry that best reflects each company’s underlying business activities based on the largest source of revenue and income. Industry classification is based on publicly available information about each company, and is primarily obtained from such company’s annual report and Form 10-K. The securities in the universe are selected using a proprietary methodology developed by Morningstar. The Fund will normally invest at least 90% of its total assets in securities that comprise the Index.

Fund Performance

This report discusses an abbreviated semi-annual fiscal period from the Fund’s inception date of August 22, 2007, through November 30, 2007.

On a market price basis, the Fund generated a total return of 0.00%; the Fund’s market price of $25.09 on November 30, 2007, was the same as at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 1.95%, representing a change in NAV to $25.58 on November 30, 2007, from $25.09 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 2.34% and the Standard & Poor’s 500 Index (“S&P 500”) returned 2.92% 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

The period from the Fund’s inception date of August 22, 2007, through November 30, 2007, was a challenging environment for investors. Concerns have mounted about the widening impact of the sub-prime mortgage crisis on the markets and the economy as a whole, causing investors to become increasingly risk-averse. In the U.S. equity market, major indices that measure performance of large-cap and growth stocks trended up, while most small-cap and value indices were down.

The U.S. economy continued to expand at a moderate pace during 2007, despite a variety of concerns. Consumer spending has held up reasonably well, and labor market trends remain fairly positive. Business investment and corporate earnings continued to grow. Expansion in net exports, supported by economic growth abroad and the weak dollar, contributed to growth in the U.S., cushioning the impact of the housing correction. Beginning in September, the Fed reduced interest rates three times, as it strives to strike a balance between providing needed support for financial markets and keeping inflation at a moderate level.

Performance Attribution

During the period from August 22, 2007, through November 30, 2007, approximately 67% of the Fund’s assets were invested in the information technology sector, with most of the remainder in the telecommunications and consumer discretionary sectors. Holdings that contributed most to returns included Apple Inc. and Microsoft Corporation, both of which experienced strong demand for new products (5.0% and 9.0% of total investments, respectively). Other holdings that were positive for performance were Hewlett-Packard Company and Intel Corporation (4.3% and 4.9% of total investments, respectively). The greatest detractors from performance were Cisco Systems, Inc. (5.5% of total investments), which dropped rather steadily during the fourth quarter of 2007 on investor concerns about the possibility of slowing growth, and telecommunications leaders Sprint Nextel Corporation and AT&T, Inc. (1.4% and 7.5% of total investments, respectively).

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MZG | Claymore/Morningstar Manufacturing Super Sector Index ETF

The Claymore/Morningstar Manufacturing Super Sector 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 Morningstar Manufacturing Super Sector Index (the “Manufacturing Super Sector Index” or “Index”). Claymore Advisors, LLC (the “Investment Adviser”) seeks a correlation over time of 0.95 or better between the Fund’s performance and the performance of the Index. A figure of 1.00 would represent perfect correlation.

The Fund, using a low cost “passive” or “indexing” investment approach, will seek to replicate, before expenses, the performance of the Morningstar Manufacturing Super Sector Index. The Index is designed to identify and track companies in “smokestack” industries that process raw materials into physical goods that are sold into industrial and consumer markets. Eligible Index securities include the total investable universe of the consumer goods, industrial materials, energy and utilities sectors. Morningstar Inc. (“Morningstar” or the “Index Provider”) classifies companies into the industry that best reflects each company’s underlying business activities based on the largest source of revenue and income. Industry classification is based on publicly available information about each company, and is primarily obtained from such company’s annual report and Form 10-K. The securities in the universe are selected using a proprietary methodology developed by Morningstar. The Fund will normally invest at least 90% of its total assets in securities that comprise the Index.

Fund Performance

This report discusses an abbreviated semi-annual fiscal period from the Fund’s inception date of August 22, 2007, through November 30, 2007.

On a market price basis, the Fund generated a total return of 7.59%, representing a change in market price to $26.79 on November 30, 2007, from $24.90 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of 7.75%, representing a change in NAV to $26.83 on November 30, 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 8.16% and the Standard & Poor’s 500 Index (“S&P 500”) returned 2.92% 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

The period from the Fund’s inception date of August 22, 2007, through November 30, 2007, was a challenging environment for investors. Concerns have mounted about the widening impact of the sub-prime mortgage crisis on the markets and the economy as a whole, causing investors to become increasingly risk-averse. In the U.S. equity market, major indices that measure performance of large-cap and growth stocks trended up, while most small-cap and value indices were down.

The U.S. economy continued to expand at a moderate pace during 2007, despite a variety of concerns. Consumer spending has held up reasonably well, and labor market trends remain fairly positive. Business investment and corporate earnings continued to grow. Expansion in net exports, supported by economic growth abroad and the weak dollar, contributed to growth in the U.S., cushioning the impact of the housing correction. Beginning in September, the Fed reduced interest rates three times, as it strives to strike a balance between providing needed support for financial markets and keeping inflation at a moderate level.

Performance Attribution

The Fund’s strongest gains were in the energy and consumer staples sectors; the consumer discretionary sector was the greatest detractor from returns. Energy positions that contributed most to returns included Exxon Mobil Corporation and Occidental Petroleum Corporation (8.6% and 1.0% of total investments, respectively). In the consumer staples sector, large branded consumer products companies including Procter & Gamble Co, Altria Group, Inc. and The Coca-Cola Company (4.0%, 2.8% and 2.3% of total investments, respectively) were among the best performing holdings. In the consumer discretionary sector, Harley-Davidson, Inc., consumer electronics producer Harman International Industries, Inc. and leather goods marketer Coach, Inc. (0.2%, 0.01% and 0.2% of total investments, respectively) were among the holdings that detracted most from returns.

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MZO | Claymore/Morningstar Services Super Sector Index ETF

The Claymore/Morningstar Services Super Sector 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 Morningstar Services Super Sector Index (the “Services Super Sector Index” or “Index”). Claymore Advisors, LLC (the “Investment Adviser”) seeks a correlation over time of 0.95 or better between the Fund’s performance and the performance of the Index. A figure of 1.00 would represent perfect correlation.

The Fund, using a low cost “passive” or “indexing” investment approach, will seek to replicate, before expenses, the performance of the Services Super Sector Index. The Index is designed to identify and track companies in industries whose main source of revenue comes from the provision of services. Eligible Index securities include the total investable universe of the healthcare, consumer services, business services and financial services sectors. Morningstar Inc. (“Morningstar” or the “Index Provider”) classifies companies into the industry that best reflects each company’s underlying business activities based on the largest source of revenue and income. Industry classification is based on publicly available information about each company, and is primarily obtained from such company’s annual report and Form 10-K. The securities in the universe are selected using a proprietary methodology developed by Morningstar. The Fund will normally invest at least 90% of its total assets in securities that comprise the Index.

Fund Performance

This report discusses an abbreviated semi-annual fiscal period from the Fund’s inception date of August 22, 2007, through November 30, 2007.

On a market price basis, the Fund generated a total return of -1.31%, representing a change in market price to $24.79 on November 30, 2007, from $25.12 at inception. On a net asset value (“NAV”) basis, the Fund also generated a total return of -1.31%, representing a change in NAV to $24.79 on November 30, 2007, from $25.12 at inception. At the end of the period the Fund’s shares were trading at parity to NAV. 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 -0.93% and the Standard & Poor’s 500 Index (“S&P 500”) returned 2.92% 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

The period from the Fund’s inception date of August 22, 2007, through November 30, 2007, was a challenging environment for investors. Concerns have mounted about the widening impact of the sub-prime mortgage crisis on the markets and the economy as a whole, causing investors to become increasingly risk-averse. In the U.S. equity market, major indices that measure performance of large-cap and growth stocks trended up, while most small-cap and value indices were down.

The U.S. economy continued to expand at a moderate pace during 2007, despite a variety of concerns. Consumer spending has held up reasonably well, and labor market trends remain fairly positive. Business investment and corporate earnings continued to grow. Expansion in net exports, supported by economic growth abroad and the weak dollar, contributed to growth in the U.S., cushioning the impact of the housing correction. Beginning in September, the Fed reduced interest rates three times, as it strives to strike a balance between providing needed support for financial markets and keeping inflation at a moderate level.

Performance Attribution

The health care sector contributed most to the Fund’s return over this period; the financials sector was the greatest detractor. In health care, holdings that contributed most to performance were U. S. industry leaders Merck & Co., Inc. and Johnson & Johnson (2.0% and 3.0% of total investments, respectively). Another strong positive for returns was a position in Google, Inc. (2.4% of total investments) in the information technology sector. Positions in the financials sector that detracted from performance include Citigroup, Inc., Bank of America Corp., Fannie Mae and Freddie Mac (2.5%, 3.1%, 0.6% and 0.3% of total investments, respectively). These stocks weakened, reflecting investors’ concerns about the impact of problems in the sub-prime mortgage business.

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CLV | Claymore/Robeco Boston Partners Large-Cap Value ETF

The Claymore/Robeco Boston Partners Large-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 Robeco Boston Partners Large Cap Value Index (the “Robeco Large Cap Value 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 Investment Adviser”) seeks a correlation over time of .95 or better between the Fund’s performance and the performance of the Index. A figure of 1.00 would represent perfect correlation.

The Index is comprised of approximately 100 to 300 equity securities and ADRs, selected from a universe of over 1,000 stocks, using a quantitative ranking methodology comprised of three factors: attractive valuation, positive momentum and favorable business fundamentals. The securities in the Index are selected and weighted using a statistical model developed by Robeco Investment Management, Inc. (“Robeco”or the “Index Provider”). The Fund generally will invest in all of the stocks comprising the Index in proportion to their weightings in the Index. Potential Index constituents include large-capitalization U.S. listed equities and ADRs with over $3 billion in market capitalization at the time of purchase.

Fund Performance

This report discusses an abbreviated semi-annual fiscal period from the Fund’s inception date of June 28, 2007, through November 30, 2007.

On a market price basis, the Fund generated a total return of -5.17%, representing a change in market price to $23.82 on November 30, 2007, from $25.12 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of -5.45%, representing a change in NAV to $23.75 on November 30, 2007, from $25.12 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 -4.60% and the Standard & Poor’s 500 Index (“S&P 500”) returned 2.24% 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

The period from the Fund’s inception date of June 28, 2007, through November 30, 2007, was a difficult environment for investors in both equity and fixed income, as concerns mounted regarding the widening impact of the sub-prime mortgage crisis on the markets and the economy as a whole. Equity markets were highly volatile, with no pronounced trend that defined the entire period.

The U.S. economy continued to expand at a moderate pace during 2007, despite a variety of concerns. Consumer spending held up reasonably well, and labor market trends remained fairly positive. Business investment and corporate earnings continued to grow. Expansion in net exports, supported by economic growth abroad and the weak dollar, contributed to growth in the U.S., cushioning the impact of the housing market correction. Beginning in September, the Federal Reserve (“the Fed”) reduced interest rates three times, striving to strike a balance between providing needed support for financial markets and keeping inflation at a moderate level.

Performance Attribution

For the period from the Fund’s inception date of June 28, 2007, through November 30, 2007, seven of the 10 industry sectors in the S&P 500 had positive returns; the strongest sectors were consumer staples and utilities, each of which posted returns above 9%. The three sectors with negative returns were financials, consumer discretionary and telecommunication services.

The sector that made the strongest contribution to the Fund’s return was the energy sector. Energy positions that were particularly strong were Petroleo Brasileiro SA (common and preferred shares, 0.3% and 0.3% of total investments, respectively) and Chevron Corporation (3.1% of total investments). The Fund’s positioning in the financial sector was the greatest detractor from returns. Positions with the greatest negative impact on return include Citigroup, Inc., American International Group, Inc., Merrill Lynch & Co., Inc., AmeriCredit Corp. and Morgan Stanley (2.7%, 2.1% , 1.0%, 0.3% and 1.2% of total investments, respectively).

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IRO | Claymore/Zacks Dividend Rotation ETF

The Claymore/Zacks Dividend 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 Dividend Rotation Index (the “Dividend Rotation Index” or “Index”). The Fund will normally invest at least 90% of its total assets in securities that comprise the Index. Claymore Advisors, LLC (the “Investment Adviser”) seeks a correlation over time of .95 or better between the Fund’s performance and the performance of the Index. A figure of 1.00 would represent perfect correlation.

The Fund, using a low cost “passive” or “indexing” investment approach, will seek to replicate, before expenses, the performance of the Zacks Dividend Rotation Index. The Dividend Rotation Index seeks to maximize dividend income that qualifies for taxation at the lowest current tax rates (“qualified dividend income” or “QDI”) by selecting dividend-paying stocks based on a quantitative methodology proprietary to Zacks Investment Research, Inc. (“Zacks” or the “Index Provider”). The Index, at the time of each rebalance, is designed to eliminate companies that have recently paid a dividend and include those companies that are expected to pay dividends while seeking to maximize QDI potential. Currently, QDI received by a non-corporate investor is generally taxed at a maximum rate of 15% for taxable years beginning before January 1, 2011. There is no guarantee that this favorable rate will be extended.

The Index is comprised of approximately 100 stocks selected, based on investment and other criteria, from a universe of the 1,500 largest listed equity companies (based on market capitalization) that pay dividends at least annually (in any amount). The universe of companies eligible for inclusion in the Index is comprised of all U.S. stocks listed on domestic exchanges, including American depositary receipts (“ADRs”). The Index will include companies with capitalizations between $200 million and $450 billion, which includes companies with all market capitalizations as defined by Zacks.

Fund Performance

This report discusses an abbreviated semi-annual fiscal period from the Fund’s inception date of October 24, 2007, through November 30, 2007.

On a market price basis, the Fund generated a total return of -6.64%, representing a change in market price to $23.64 on November 30, 2007, from $25.32 at inception. On a net asset value (“NAV”) basis, the Fund generated a total return of -6.52%, representing a change in NAV to $23.67 on November 30, 2007, from $25.32 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 -6.31% and the Standard & Poor’s 500 Index (“S&P 500”) returned 2.28% 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

During the brief period from the fund’s inception date of October 24, 2007, through November 30, 2007, returns of essentially all major equity indices were negative. Large-cap stocks generally performed better than small-cap, as investors demonstrated a preference for securities perceived as less risky.

Economic reports during the period were mixed, as the U.S. economy struggled to cope with two related issues, a slump in the housing market and a broadly-based tightening of credit conditions. So far, consumer spending has not appeared to be greatly affected by falling household wealth due to declining home prices. Trends in the labor market and in business investment remained fairly positive. Expansion in net exports, supported by economic growth abroad and the weak dollar, contributed to growth in the U.S., cushioning the impact of the housing correction. The Fed has begun to reduce interest rates, striving to strike a balance between providing needed support for financial markets and keeping inflation at a moderate level.

Performance Attribution

For the period from October 24, 2007, through November 30, 2007, the telecommunication services and materials sectors made the strongest contributions to the Fund’s return. Sectors that detracted most from performance were the consumer discretionary and financial sectors. In the consumer discretionary sector, positions that detracted from performance included retailer The Cato Corporation, newspaper publisher The McClatchy Company and home builder Building Materials Holding Corporation (1.4%, 1.3% and 1.2% of total investments, respectively). In the financial sector, MBIA Inc., which provides financial guarantee insurance and other financial services, and Corus Bankshares, Inc., a regional bank with significant involvement in mortgage lending, (0.8% and 3.0% of total investments, respectively) were among the weakest performers. Strong performance in the telecommunication services sector came from one position, Atlantic Tele-Network, Inc. (1.0% of total investments), which provides wireless and wireline telecommunications services in the Caribbean and North America. In the materials sector, the strongest performers were Quanex Corporation (0.7% of total investments), a producer of engineered metal products that reported stronger than expected earnings, and Methanex (1.3% of total investments), which supplies methanol to international markets.

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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.

The Fund may not be fully invested at times, either as a result of cash flows into the Fund or reserves of cash held by the Fund to meet redemptions and expenses. If the Fund utilizes a sampling approach or futures or other derivative positions, its return may not correlate as well with the return on the index, as would be the case if it purchased all of the stocks in the index with the same weightings as the index.

Issuer-Specific Changes Risk . The value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. The value of securities of smaller issuers can be more volatile than that of larger 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.

The Claymore/BBD High Income Index ETF is also subject to the following risks:

REIT Risk. Investments in securities of real estate companies involve risks. These risks include, among others, adverse changes in national, state or local real estate conditions; obsolescence of properties; changes in the availability, cost and terms of mortgage funds; and the impact of changes in environmental laws. In addition, a REIT that fails to comply with federal tax requirements affecting REITs may be subject to federal income taxation, or the federal tax requirement that a REIT distribute substantially all of its net income to its shareholders may result in a REIT having insufficient capital for future expenditures. The value of a REIT can depend on the structure of and cash flow generated by the REIT. In addition, like mutual funds, REITs have expenses, including advisory and administration fees, that are paid their shareholders. As a result, you will absorb duplicate levels of fees when the Fund invests in REITs. In addition, REITs are subject to certain provisions under federal tax law. The failure of a company to qualify as a REIT could have adverse consequences for the Fund, including significantly reducing return to the Fund on its investment in such company.

Master Limited Partnership Risk . Investments in securities of master limited partnerships involve risks that differ from an investment in common stock. Holders of the units of master limited partnerships have more limited control and limited rights to vote on matters affecting the partnership. There are also certain tax risks associated with an investment in units of master limited partnerships. In addition, conflicts of interest may exist between common unit holders, subordinated unit holders and the general partner of a master limited partnership, including a conflict arising as a result of incentive distribution payments.

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Risks of Investing In Other Investment Companies . Investments in securities of other investment companies involve risks, including, among others, the fact that shares of other investment companies are subject to the management fees and other expenses of those companies, and the purchase of shares of some investment companies (in the case of closed-end investment companies) may sometimes require the payment of substantial premiums above the value of such companies’ portfolio securities or net asset values. The Fund must continue, at the same time, to pay its own management fees and expenses with respect to all of its investments, including shares of other investment companies. The securities of other investment companies may also be leveraged and will therefore be subject to certain leverage risks.

Preferred Stock Risk . There are certain additional risks associated with investing in preferred securities, including, but not limited to: (i) preferred securities may include provisions that permit the issuer, at its discretion, to defer or omit distributions for a stated period without any adverse consequences to the issuer; (ii) preferred securities are generally subordinated to bonds and other debt instruments in a company’s capital structure in terms of having priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than more senior debt instruments; preferred securities may be substantially less liquid than many other securities, such as common stocks or U.S. Government securities; generally, traditional preferred securities offer no voting rights with respect to the issuing company unless preferred dividends have been in arrears for a specified number of periods, at which time the preferred security holders may elect a number of directors to the issuer’s board; in certain varying circumstances, an issuer of preferred securities may redeem the securities prior to a specified date.

Distribution Risk. The Fund intends to make a level dividend distribution each month to its shareholders of the net investment income of the Fund after payment of Fund operating expenses. The level dividend rate may be modified by the Fund’s Board of Trustees from time to time. If, for any monthly distribution, the Fund’s investment company taxable income, if any (which term includes net short-term capital gain) is less than the amount of the distribution, the difference will generally be a tax-free “return of capital” distributed from the Fund’s assets. The ultimate tax characterization of the Fund’s distributions in a calendar year may not finally be determined until after the end of that calendar year. This distribution policy may, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a “return of capital,” resulting in less of a shareholder’s assets being invested in the Fund and, over time, increase the Fund’s expense ratio. When the Fund distributes a “return of capital,” it means that the Fund is returning to shareholders a portion of their investment in the Fund. Any such distributions that constitute a return of capital would thus have the effect of reducing shareholders’ basis in their Shares. Accordingly, Shareholders who sell their Shares after receiving a return of capital might realize a higher amount of capital gain, and thus be subject to more tax on such capital gain, than if such Shareholders had not received a return of capital. See “How to Buy and Sell Shares – Distributions” for an additional discussion of the Fund’s intention to make a monthly level dividend distribution and “Federal Income Taxation-Taxes on Distributions” for an additional discussion of the tax consequences to Shareholders of a return of capital.

The following outlines the primary risks of strategies pursued by the types of CEFs in which the Claymore/BBD High Income Index ETF may invest.

Credit Risk . Credit risk is the risk that a bond issuer fails to make principal or interest payments when due to the Fund, or that the credit quality of the issuer falls. CEFs’ investments in securities issued by U.S. Government sponsored entities, such as the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association, are not funded by Congressional appropriations and are neither guaranteed nor insured by the U.S. Government. Furthermore, no assurances can be given that the U.S. Government would provide financial support to its agencies or instrumentalities where it is not obligated to do so. Corporate bonds are subject to greater credit risk than U.S. Government bonds.

High Yield Risk. CEFs that invest in high yield securities and unrated securities of similar credit quality (commonly known as “junk bonds”) may be subject to greater levels of credit and liquidity risk than funds that do not invest in such securities. These securities are considered predominately speculative with respect to the issuer’s continuing ability to make principal and interest payments. An economic downturn or period of rising interest rates could adversely affect the market for these securities and reduce the Fund’s ability to sell these securities. If the issuer of a security is in default with respect to interest or principal payments, the Fund may lose its entire investment.

Convertible Security Risk . Convertible security risk is the risk that the value of CEFs’ convertible securities may decline in response to such factors as rising interest rates and fluctuations in the market price of the convertible securities’ underlying common stock.

Prepayment Risk. Prepayment risk is the risk that homeowners or consumers may prepay mortgage or consumer loans, which may affect the yield of mortgage- or asset-backed securities that are backed by such loans.

The Claymore/KLD Sudan Free Large Cap Core ETF is also subject to Social Investment Risk. The KLD Index’s social policy could cause the Fund to underperform similar funds that do not have a social policy. Among the reasons for this are:

The Claymore/Robeco Boston Partners Large-Cap Value Index ETF is also subject to Portfolio Turnover Risk. The Fund may engage in active and frequent trading of its portfolio securities in connection with the quarterly rebalancing of the Index and therefore the Fund’s investments. A portfolio turnover rate of 200%, for example, is equivalent to the Fund buying and selling all of its securities two times during the course of a year. A high portfolio turnover rate (over 100%) could result in high brokerage costs. While a high portfolio turnover rate can result in an increase in taxable capital gains distributions to the Fund’s shareholders, the Fund will seek to utilize the creation and redemption in-kind mechanism to minimize capital gains to the extent possible.

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The three Claymore/Morningstar Super Sector Index ETFs are also subject to License Agreement Term Risk . The Investment Adviser’s license agreement with the Index Provider to use the Index has a five-year term, and is renewable thereafter on an annual basis. There can be no assurance that the license agreement will be renewed or extended at the end of that term, or that the Investment Adviser will be able to enter into another agreement with the Index Provider to use the Index. If no agreement is entered into at the end of the five-year term, the Investment Adviser may be required to obtain a replacement Index Provider on behalf of the Fund.

The Claymore/Morningstar Information Super Sector Index ETF is also subject to the following risks:

Software/Hardware Sector Risk. Competitive pressures may have a significant effect on the financial condition of companies in the software and hardware sectors. Also, many of the products and services offered by software and hardware companies are subject to the risks of short product cycles and rapid obsolescence. Companies in the software and hardware sectors also may be subject to competition from new market entrants. Such companies also may be subject to risks relating to research and development costs and the availability and price of components. As product cycles shorten and manufacturing capacity increases, these companies could become increasingly subject to aggressive pricing, which hampers profitability.

Media Sector Risk. Companies engaged in design, production or distribution of goods or services for the media industry (including television or radio broadcasting or manufacturing, publishing, recordings and musical instruments, motion pictures and photography) may become obsolete quickly. Media companies are subject to risks which include cyclicality of revenues and earnings, a decrease in the discretionary income of targeted individuals, changing consumer tastes and interests, fierce competition in the industry and the potential for increased government regulation. Media company revenues are dependent in large part on advertising spending. A weakening general economy or a shift from online to other forms of advertising may lead to a reduction in discretionary spending on online advertising. Additionally, companies engaged in the media industry can be significantly affected by federal deregulation of cable and broadcasting, competitive pressures and government regulation.

Telecommunications Sector Risk. The telecommunications sector is subject to extensive government regulation. The costs of complying with governmental regulations, delays or failure to receive required regulatory approvals or the enactment of new adverse regulatory requirements may adversely affect the business of the telecommunications companies. The telecommunications sector can also be significantly affected by intense competition, including competition with alternative technologies such as wireless communications, product compatibility, consumer preferences, rapid obsolescence and research and development of new products. Other risks include those related to regulatory changes, such as the uncertainties resulting from such companies’ diversification into new domestic and international businesses, as well as agreements by any such companies linking future rate increases to inflation or other factors not directly related to the actual operating profits of the enterprise.

The Claymore/Morningstar Services Super Sector Index ETF is also subject to the following risks:

Health Care Sector Risk. Companies in the health care sector may be susceptible to government regulation and reimbursement rates. Such companies may also be heavily dependent on patent protection, with their profitability affected by the expiration of patents. Companies in the health care sector may also be subject to expenses and losses from extensive litigation based on product liability and similar claims, as well as competitive forces that may make it difficult to raise prices and, in fact, may result in price discounting. The process for obtaining new product approval by the Food and Drug Administration is long and costly. Health care service providers may have difficulty obtaining staff to deliver service, and may be susceptible to product obsolescence. Such companies also may be characterized by thin capitalization and limited product lines, markets, financial resources or personnel.

Consumer Services Sector Risk. The success of companies in the consumer services sector depends heavily on disposable household income and consumer spending. Companies in the consumer services sector may be subject to severe competition. Changes in demographics and consumer tastes can also affect the demand for, and success of, consumer products in the marketplace. Also, the success of food and soft drink may be strongly affected by fads, marketing campaigns and other factors affecting supply and demand.

Business Services Sector Risk. Companies in the business services sector can be significantly affected by competitive pressures, such as technological developments, fixed-rate pricing, and the ability to attract and retain skilled employees. The success of companies that provide business-related services is, in part, subject to continued demand for business services as companies and other organizations seek alternative, cost-effective means to meet their economic goals.

Financial Services Sector Risk. The financial services sector is subject to extensive government regulation, can be subject to relatively rapid change due to increasingly blurred distinctions between service segments, and can be significantly affected by availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, and price competition.

The Claymore/Morningstar Services Super Sector Index ETF is also subject to the following risks:

Consumer Goods Sector Risk . Companies engaged in the manufacture and distribution of consumer goods are subject to vast fluctuations in supply and demand. These companies may also be adversely affected by changes in consumer spending as a result of world events, political and economic conditions, commodity price volatility, changes in exchange rates, imposition of import controls, increased competition, depletion of resources and labor relations. Companies in this sector are subject to government regulation affecting the permissibility of using various food additives and production methods, which regulations could affect company profitability. Tobacco companies may be adversely affected by the adoption of proposed legislation and/or by litigation. Also, the success of food and soft drink may be strongly affected by fads, marketing campaigns and other factors affecting supply and demand.

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Industrial Materials Sector Risk. The companies in the industrial materials sector can be significantly affected by the level and volatility of commodity prices, the exchange value of the dollar, import controls, worldwide competition, liability for environmental damage, depletion of resources, and mandated expenditures for safety and pollution control. The stock prices of companies in the industrial materials sector are affected by supply and demand both for their specific product or service and for industrial materials sector products in general. Government regulation, world events and economic conditions may affect the performance of companies in the industrial materials sector. Companies in the industrial materials sector may be at risk for product liability claims.

Energy Sector Risk . The profitability of companies in the energy sector is related to worldwide energy prices, exploration, and production spending. Such companies also are subject to risks of changes in exchange rates, government regulation, world events, depletion of resources and economic conditions, as well as market, economic and political risks of the countries where energy companies are located or do business. Oil and gas exploration and production can be significantly affected by natural disasters. Companies in the energy sector may be adversely affected by changes in exchange rates, interest rates, government regulation, world events, and economic conditions. Oil exploration and production companies may be at risk for environmental damage claims.

Utilities Sector Risk. The rates that traditional regulated utility companies may charge their customers generally are subject to review and limitation by governmental regulatory commissions. Although rate changes of a utility usually fluctuate in approximate correlation with financing costs due to political and regulatory factors, rate changes ordinarily occur only following a delay after the changes in financing costs. This factor will tend to favorably affect a regulated utility company’s earnings and dividends in times of decreasing costs, but conversely, will tend to adversely affect earnings and dividends when costs are rising. The value of regulated utility debt securities (and, to a lesser extent, equity securities) tends to have an inverse relationship to the movement of interest rates. Certain utility companies have experienced full or partial deregulation in recent years. These utility companies are frequently more similar to industrial companies in that they are subject to greater competition and have been permitted by regulators to diversify outside of their original geographic regions and their traditional lines of business. These opportunities may permit certain utility companies to earn more than their traditional regulated rates of return. Some companies, however, may be forced to defend their core business and may be less profitable. Among the risks that may affect utility companies are the following: risks of increases in fuel and other operating costs; the high cost of borrowing to finance capital construction during inflationary periods; restrictions on operations and increased costs and delays associated with compliance with environmental and nuclear safety regulations; and the difficulties involved in obtaining natural gas for resale or fuel for generating electricity at reasonable prices. Other risks include those related to the construction and operation of nuclear power plants; the effects of energy conservation and the effects of regulatory changes.

The Claymore/Zacks Dividend Rotation index ETF is also subject to the following risks:

QDI Tax Risk. Currently, QDI received by a non-corporate investor is generally taxed at a maximum rate of 15% for taxable years beginning before January 1, 2011.Thereafter, without further Congressional action this income will become ordinary income subject to the maximum marginal tax rate of the investor. If Congress does not extend the current tax rates applicable to QDI, you may be subject to higher tax rates on your dividends from the Fund for taxable years beginning after January 1, 2011.

Portfolio Turnover Risk. The Fund may engage in active and frequent trading of its portfolio securities in connection with the monthly rebalancing of the Index, and therefore the Fund’s investments. A portfolio turnover rate of 200%, for example, is equivalent to the Fund buying and selling all of its securities two times during the course of the year. A high portfolio turnover rate (for example, over 100%) could result in high brokerage costs. While a high portfolio turnover rate can result in an increase in taxable capital gains distributions to the Fund’s shareholders, the Fund will seek to utilize the creation and redemption in-kind mechanism to minimize capital gains to the extent possible.

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.