Cambria Funds Adds a Multifactor ETF
Mebane Faber’s Cambria Funds, one of the fastest-growing issuers of actively managed exchange traded funds, added its sixth ETF Wednesday when it introduced the Cambria Value and Momentum ETF (VAMO) .
The new ETF invests in 100 stocks with market values above $200 million that display positive momentum and value traits.
“VAMO allows the investor to hedge the equity portfolio when the market is expensive or in a downtrend, or both. The Fund will scale the hedges up and down on a weekly basis. At launch, its two largest sectors exposures are financial and consumer discretionary stocks, and the fund is hedged approximately 100%,” according to a statement issued by California-based Cambria.
“Value factors have long been emphasized by investors as key predictors of a company’s strength. Likewise, momentum factors have historically been complementary to a portfolio sorted on value,” notes Cambria on VAMO’s web page.
Industrials and health care stocks, which combine for 30 percent of the new ETF’s weigh, are VAMO’s largest sector weights after financial services and consumer discretionary. Technology and energy names each command weights of seven percent.
Though VAMO only holds stocks with market values in excess of $200 million, small caps comprise 26 percent of the new ETF’s portfolio. Mid caps chime in at 43 percent while large caps garner 31 percent of the new ETF’s weight.
“Value and momentum have long been important factors when selecting equity investments. Combining these two factors with hedging provides a strong portfolio of companies with the potential to minimize downside losses,” said Faber in the statement.
VAMO is Cambria’s sixth ETF. The firm has over $400 million in assets under management.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
