Cambria Investment Management, an El Segundo, Calif.-based money management firm, today is launching the first ETF in a lineup of funds that will serve up access to yield-rich equities both in the U.S. and abroad. It will be the company’s first solo effort after teaming up with AdvisorShares on “GTAA,” a global tactical ETF.
The Cambria Shareholder Yield ETF (NYSEArca:SYLD) will invest primarily in U.S. equities that serve up “high shareholder yield,” the fund’s prospectus said. That yield is measured by a company’s cash flows, as reflected by their payment of dividends, and their return of capital to shareholders.
SYLD is designed to be a portfolio of equities from companies that show solid cash flows, strong growth potential and higher yields relative to their peers. While it will focus roughly on 100 securities, it may at times also include “limited” foreign and emerging market American depositary receipts. The fund will have an annual expense ratio of 0.59 percent, or $59 for every $10,000 invested.
Cambria is no stranger to the world of ETFs. It serves as advisor to the Cambria Global Tactical ETF (GTAA), a fund brought to market by Bethesda, Md.-based AdvisorShares in October 2010 that has gathered some $60 million in assets. GTAA is an actively managed fund of funds that uses index ETFs to execute its strategy of seeking exposure across many asset classes, including equities, bonds, real estate, commodities and currencies.
But SYLD marks the first fund rollout the company’s had since it requested permission to market its own actively managed ETFs back in mid-2011. And the launch comes at a time when several ETF providers are looking for ways to tap into investor demand for income-generating strategies, given that yields in the fixed-income space are compressed by the Federal Reserve’s policies.
Striking Out On Its Own
SYLD, which also employs market capitalization, sector concentration and liquidity screens in the construction of its portfolio, is one of four ETFs Cambria detailed in a prospectus last updated with regulators on May 6. The registration statements became effective on May 7.
All of these ETFs have a strong focus on yield, and two of them are essentially developed-market and emerging-market takes on SYLD.
The ETFs, apart from SYLD, include:
- The Cambria Foreign Shareholder Yield ETF (NYSEArca:FYLD), with an annual expense ratio of 0.69 percent, will invest in developed-country companies that provide high shareholder yield as measured by cash flows and return of capital, just as SYLD. Cambria said in the filing it will primarily look at countries included in the S'P Developed Broad Market Index universe.
- The Cambria Emerging Shareholder Yield ETF (NYSEArca:EYLD), meanwhile, will invest in emerging market companies that fit the “high shareholder yield” criteria, with the main universe being those countries included in the S'P Emerging Broad Market Index. The fund, too, will cost 0.69 percent.
- The Cambria Global Income And Currency Strategies ETF (NYSEArca:FXFX)—the fourth strategy included in the filing—will invest in securities that provide income and exposure to global currencies, particularly those of developed economies, and will cost 0.79 percent.
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