INDEX METHODOLOGY

The Index is designed to track the performance of liquid, tradable international securities in developed markets. The universe of securities eligible for inclusion in the Index includes all equities listed on international developed market exchanges. Aggregate country weightings are based on the aggregate market capitalization of each country’s constituents, modified to account for liquidity and risk. The weighting methodology is designed to achieve broad-based international diversification while enhancing tradability.

INDEX CONSTRUCTION

1. Potential Index constituents include internationally listed equities that meet minimum liquidity, tradability and other requirements, with market capitalizations of approximately U.S. $1 billion or greater.
2. The Robeco Developed International Equity Index is comprised of, at any given time, between 100-200 stocks selected using a rules-driven quantitative methodology proprietary to Robeco. The Index seeks to establish a representation of each developed country’s aggregate modified market capitalization.
3. Each stock is ranked using a proprietary multi-factor stock selection model and sorted from most attractive to least attractive. The model identifies attractive stocks based on valuation factors (such as book value-to-price ratio), momentum factors (such as price return over the past 6 to 12 months), earnings revision factors (such as positive and negative revisions to consensus earnings estimates), and management policy factors (such as share buybacks). The constituent selection methodology was developed by Robeco as a 100% quantitative, rules-driven approach to identify those companies that offer the greatest potential for price appreciation with strong risk diversification. Portfolio risk management tools, including a quantitative risk model and portfolio optimizer, are utilized to balance risk and reward.
4. Country allocations are based on each developed country’s aggregate modified market capitalization.
5. Constituent rebalancing is completed monthly and universe reconstitution is completed annually.

RISKS AND OTHER CONSIDERATIONS

Investors should consider the following risk factors and special considerations associated with investing in the Fund, which may cause you to lose money.

Investment Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire principal amount that you invest.

Equity Risk. A principal risk of investing in the Fund is equity risk, which is the risk that the value of the securities held by the Fund will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of equity securities of an issuer held by the Fund; the price of common stock of an issuer may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the common stocks and other equity securities held by the Fund. In addition, common stock of an issuer in the Fund’s portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition. Common stock is subordinated to preferred stocks, bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater dividend risk than preferred stocks or debt instruments of such issuers. In addition, while broad market measures of common stocks have historically generated higher average returns than fixed income securities, common stocks have also experienced significantly more volatility in those returns.

Foreign Investment Risk. The Fund’s investments in non-U.S. issuers 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. The Fund’s investments in foreign securities may involve higher costs than investments in U.S. securities, including higher transaction and custody costs as well as the imposition of additional taxes by foreign governments. The Fund’s foreign investments may also involve risks associated with the level of currency exchange rates, less complete financial information about the issuers, less market liquidity, more market volatility and political instability. Future political and economic developments, the possible imposition of withholding taxes on dividend income, the possible seizure or nationalization of foreign holdings, the possible establishment of exchange controls or freezes on the convertibility of currency, or the adoption of other governmental restrictions might adversely affect the Fund’s investments in foreign securities. Additionally, foreign issuers may be subject to less stringent regulation, and to different accounting, auditing and recordkeeping requirements. 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.

Industry Risk. While the Fund does not concentrate in any industry, to the extent that the Fund focuses its investments in a particular industry or group of related industries, the NAV of the Fund will be more susceptible to factors affecting that industry or sector, which, depending on the particular industry or sector, may include, among others: governmental regulation; inflation; cost increases in raw materials, fuel and other operating expenses; technological innovations that may render existing products and equipment obsolete; and increasing interest rates resulting in high interest costs on borrowings needed for capital investment, including costs associated with compliance with environmental and other regulations. In such circumstances the Fund’s investments will be subject to greater risk and market fluctuation than a fund that had securities representing a broader range of investment alternatives.

Small and Medium-Sized Company Risk. Investing in securities of small and medium-sized companies involves greater risk than is customarily associated with investing in more established companies.These companies’ stocks may be more volatile and less liquid than those of more established companies.These stocks may have returns that vary, sometimes significantly, from the overall stock market.

Non-Correlation Risk. The Fund’s return may not match the return of the Robeco Developed International Equity Index for a number of reasons. For example, the Fund incurs a number of operating expenses not applicable to the Robeco Developed International Equity Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund’s securities holdings to reflect changes in the composition of the Robeco Developed International Equity Index. Since the Robeco Developed International Equity Index constituents may vary on a monthly basis, the Fund’s costs associated with rebalancing may be greater than those incurred by other exchange-traded funds that track indices whose composition changes less frequently.

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 Robeco Developed International Equity Index as would be the case if it purchased all of the stocks in the Robeco Developed International Equity Index with the same weightings as the Robeco Developed International Equity Index.

Replication Management Risk. Unlike many investment companies, the Fund is not “actively” managed.Therefore, it would not necessarily sell a stock because the stock’s issuer was in financial trouble unless that stock is removed from the Robeco Developed International Equity Index.

Issuer-Specific Changes. 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 Fund is 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.

Claymore ETFs are listed on the AMEX or NYSE Arca, depending on the ETF listing, the same way as shares of a publicly-traded company. Claymore ETFs can be purchased through most brokerage accounts. They can be bought and sold throughout the day on the AMEX or NYSE Arca, depending on the ETF listing, during normal trading hours. The Fund issues and redeems shares at NAV only in large blocks of 200,000 shares (each block of 200,000 shares is called a “Creation Unit”) or multiples thereof. Only broker-dealers or large institutional investors with creation and redemption agreements, called Authorized Participants (“APs”), can purchase or redeem these Creation Units.

Investors buying or selling ETF shares on the secondary market may incur brokerage costs and other transactional fees. Shares of ETFs may fluctuate in price due to daily changes in trading volume. At times, shares may not have a high volume of trading. Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund.

Robeco Inv