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Closed-End Convertible & Income Portfolio Series 5

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Investment Objective

The Closed-End Convertible & Income Portfolio ("Trust") seeks to provide high current income and the potential for capital appreciation by investing in common stocks of closed-end investment companies that are considered to be convertible securities and/or income funds.

Principal Investment Strategy

Selection Criteria

Risks and Other Considerations

Portfolio Information

Deposit Information

Inception Date 1/26/2005
Non-Reoffered Date 10/13/2005
Mandatory Maturity Date 1/27/2010
Ticker Symbol CECIEX
Trust Structure Grantor
Inception Unit Price $10.0000
Maturity Price (as of 1/27/10) $6.0646

Past performance is no guarantee of future results. Investment returns and principal value will fluctuate with changes in market conditions. Investors' units, when redeemed, may be worth more or less than their original cost.

This information does not constitute an offer to sell or a solicitation of any offer to buy: nor shall there be any sale of these securities in any state where the offer, solicitation, or sale is not permitted.


Principal Investment Strategy

The Trust will invest, under normal circumstances, at least 80% of the value of its assets in common stocks of closed-end investment companies ("closed-end funds"), that are considered to be convertible securities and/or income funds. Claymore, through proprietary research and strategic alliances, will strive to select closed-end funds featuring the potential for current income, diversification and overall liquidity.

Selection Criteria

The Sponsor has selected for the portfolio common stocks of closed-end funds believed to have the best potential to achieve the Trust’s investment objective (the “securities”). The closed-end funds’ portfolios consist primarily of convertible securities and/or income producing securities including, high-yield bonds and preferred securities.

As of the Trust’s inception date (the “Inception Date”), 100% of the Trust’s portfolio is invested in securities of closed-end funds with portfolios that consist primarily of convertible securities and/or income producing securities including high yield bonds and preferred securities. When selecting closed-end funds for inclusion in this portfolio the Sponsor looks at numerous factors. These factors include but are not limited to:

  • Investment Objective. The Sponsor favors funds that have a clear investment objective in line with the Trust’s objective and, based upon a review of publicly available information, appear to be maintaining it.
  • Premium/Discount. The Sponsor favors funds that are trading at a discount relative to their peers and relative to their long-term average.
  • Consistent Dividend. The Sponsor favors funds that have a history of paying a consistent and competitive dividend which, in the opinion of the Sponsor, can be maintained.
  • Performance. The Sponsor favors funds that have a history of strong relative performance (based on market price and net asset value) when compared to their peers and an applicable benchmark.

Convertible securities are bonds, debentures, notes, preferred securities or other securities that may be converted or exchanged (by the holder or the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio or predetermined price (the “conversion price”). Convertible securities have general characteristics similar to both debt securities and common stocks. The interest paid on convertible securities may be fixed or floating rate. Floating rate convertible securities may specify an interest rate or rates that are conditioned upon changes to the market price of the underlying common stock. Convertible securities also may be issued in zero coupon form with an original issue discount. Although to a lesser extent than with debt securities, the market value of convertible securities tends to decline as interest rates increase and, conversely, tends to increase as interest rates decline. In addition, because of the conversion feature, the market value of convertible securities tends to vary with fluctuations in the market value of the underlying common stocks and, therefore, will also react to the variations in the general market for common stocks. Depending upon the relationship of the conversion price to the market value of the underlying common stock, a convertible security may trade more like a common stock than a debt instrument. With interest rates at historic lows, investors seeking better total returns than those available from bonds and other fixed-income instruments might find convertible securities an attractive alternative.

Investors who believe that equity markets will improve in the months and years ahead, but who still want an investment with a fixed-income component, might also be drawn to convertible securities. The Sponsor believes that the recent year’s performance of both the convertible and equity markets in the United States have created some inherent inefficiencies in the convertible market that might be profitably exploited by skilled convertible securities managers.

Mandatory convertible securities are distinguished as a subset of convertible securities because they may be called for conversion by the issuer after a particular date and under certain circumstances (including at a specified price) established upon its issuance. If a mandatory convertible security is called for conversion, the closed-end fund will be required to either convert it into the underlying common stock or sell it to a third party.

Convertible securities are investments that typically provide for a stable stream of income with generally higher yields than common stocks. There can be no assurance of current income because the issuers of the convertible securities may default on their obligations. Certain convertible securities may be below investment grade quality.

Convertible securities generally offer lower interest or dividend yields than non-convertible securities of similar credit quality because of the potential for capital appreciation. A convertible security, in addition to providing current income, offers the potential for capital appreciation through the conversion feature, which enables the holder to benefit from any increases in the market price of the underlying common stock.

Some of the securities held by the closed-end funds may be income producing securities including corporate bonds, preferred securities and high-yield bonds. High-yield or “junk” bonds, the generic names for bonds rated below the category of “BBB” by Standard & Poor’s or the category of “Baa” by Moody’s, are frequently issued by corporations in the growth stage of their development or by established companies who are highly leveraged or whose operations or industries are depressed. Obligations rated below investment grade should be considered speculative as these ratings indicate a quality of less than investment grade. Because high-yield bonds are generally subordinated obligations and are perceived by investors to be riskier than higher rated securities, their prices tend to fluctuate more than higher rated securities and are affected by short-term credit developments to a greater degree.

See “Description of Ratings” in Part B of the prospectus for additional information regarding the ratings criteria.

Risks and Other Considerations

You can lose money by investing in the Trust. The Trust also might not perform as well as you expect. This can happen for reasons such as these:

  • Share prices can be volatile. The value of your investment may fall over time.
  • The value of the securities in the closed-end funds will generally fall if interest rates, in general, rise. Typically, securities with longer periods before maturity are more sensitive to interest rate changes.
  • An issuer may be unwilling or unable to make principal payments and/or to declare dividends in the future, may call a security before its stated maturity, or may reduce the level of dividends declared. This may result in a reduction in the value of your units.
  • The financial condition of an issuer may worsen or its credit ratings may drop, resulting in a reduction in the value of your units. This may occur at any point in time, including during the primary offering period.
  • The Trust is concentrated in securities of closed-end funds. Closed-end funds are actively managed investment companies that invest in various types of securities. Closed-end funds issue shares of common stock that are traded on a securities exchange. Closed-end funds are subject to various risks, including management’s ability to meet the Closed- End Fund’s investment objective, and to manage the closed-end fund portfolio when the underlying securities are redeemed or sold, during periods of market turmoil and as investors’ perceptions regarding closed-end funds or their underlying investments change. Closed-end funds are not redeemable at the option of the shareholder and they may trade in the market at a discount to their net asset value. Closed-end funds may also employ the use of leverage which increases risk and volatility.
  • Certain closed-end funds held by the Trust invest in bonds that are rated below investment grade and are considered to be “junk” securities. Below investment grade obligations are considered to be speculative and are subject to greater market and credit risks, and accordingly, the risk of non-payment or default is higher than investment grade securities. In addition, such securities may be more sensitive to interest rate changes and more likely to receive early returns of principal.
  • Some of the closed-end funds held by the Trust may invest in bonds that are rated as investment grade by only one rating agency. As a result, such splitrated securities may have more speculative characteristics and are more subject to a greater risk of default than securities rated as investment grade by both Moody’s and Standard & Poor’s.
  • Certain closed-end funds held by the Trust invest in convertible securities. Convertible securities generally offer lower interest or dividend yields than non-convertible fixed-income securities of similar credit quality because of the potential for capital appreciation. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, a convertible security’s market value also tends to reflect the market price of the common stock of the issuing company, particularly when that stock price is greater than the convertible security’s “conversion price.” Convertible securities fall below debt obligations of the same issuer in order of preference or priority in the event of a liquidation and are typically unrated or rated lower than such debt obligations.
  • The Trust is considered to be a “trust of funds.” As such, it is subject to certain termination restrictions that may result in a reduction in the value of your units.
  • Inflation may decrease the value of money, which may lead to a decrease in the value of assets or income from investments.
  • We do not actively manage the portfolio. The Trust will generally hold, and may continue to buy, the same securities even though the security’s outlook or rating or its market value or yield may have changed.

Please see the Trust prospectus for more complete risk information.

Unit Investment Trusts are fixed, not actively managed and should be considered as part of a long-term strategy. Investors should consider their ability to invest in successive portfolios, if available, at the applicable sales charge. UITs are subject to annual fund operating expenses in addition to the sales charge. Investors should consult an attorney or tax advisor regarding tax consequences associated with an investment from one series to the next, if available, and with the purchase or sale of units. Guggenheim Funds Distributors, LLC does not offer tax advice.




Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objective, risks charges, expenses and the other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or call 800.820.0888.

Investing involves risk, including the possible loss of principal.

Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Japan Limited, and GS GAMMA Advisors, LLC. Securities offered through Guggenheim Funds Distributors, LLC.

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