Cambria Launches Two New ETFs: Micro and Small Cap Shareholder Yield and Fixed Income-Focused Tactical Yield
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Insights
The introduction of Cambria Investment Management's new active ETFs, MYLD and TYLD, represents a strategic move within the asset management industry to diversify offerings and cater to nuanced investor preferences. The focus on micro and small-cap stocks with high shareholder yield, alongside a tactical approach to fixed income, could potentially fill market gaps for investors seeking yield in a low-interest environment. The emphasis on high-cash distribution companies is particularly noteworthy, as it aligns with the growing investor emphasis on tangible returns in the form of dividends and buybacks.
The performance of Cambria Shareholder Yield ETF (SYLD) is commendable, with its ranking in Morningstar's Mid-Cap Value Category signaling robust fund management and strategy execution. However, the variance in performance over different time horizons suggests that while the fund's strategy may excel in certain market conditions, it exhibits variability which investors should consider when evaluating fund consistency and risk-adjusted returns. The $1 billion in assets under management for SYLD indicates investor confidence and successful capital attraction, which bodes well for the introduction of MYLD and TYLD.
Overall, these new ETFs could provide a differentiated investment vehicle for those looking to diversify within the fixed income and small-cap equity space. The long-term success of these funds will likely depend on their ability to deliver consistent performance and maintain a competitive edge in their respective market segments.
The launch of Cambria's MYLD and TYLD ETFs comes at a time when the market is experiencing significant shifts in investor sentiment towards fixed income and small-cap equities. The innovative approach of MYLD, focusing on shareholder yield in the small and micro-cap sector, taps into a niche that is often underrepresented and potentially ripe for value discovery. This could appeal to investors who are looking for opportunities beyond the highly efficient large-cap space where market inefficiencies are harder to exploit.
TYLD's dynamic approach to fixed income, adjusting exposure based on yield spreads, is particularly relevant given the current interest rate environment. As investors navigate the complexities of bond market volatility, a strategy that offers a conservative baseline with the flexibility to capitalize on wider spreads could resonate well with those seeking a balance between risk and return.
The historical performance of Cambria's existing ETFs, particularly SYLD's strong track record, may serve as a positive indicator to potential investors of the firm's capabilities. However, it is crucial for market participants to conduct thorough due diligence, as past performance is not always indicative of future results, especially in the context of new fund offerings that have yet to establish a track record.
The strategic expansion of Cambria's ETF offerings into small and micro-cap equities and a tactical fixed income product reflects broader economic trends. With interest rates and bond yields becoming a focal point for investors, TYLD’s strategy of adjusting exposure based on yield spreads could provide a hedge against interest rate risk and inflationary pressures. This is particularly relevant considering the recent economic environment characterized by monetary policy tightening and inflation concerns.
MYLD's focus on smaller companies with strong shareholder yield profiles could be seen as a response to the economic cycle where smaller firms may offer growth potential during economic recovery phases. However, these firms also carry inherent risks due to their size and the less predictable nature of their performance, which can be accentuated during economic downturns or periods of market stress.
Understanding the economic implications of these new ETFs is essential for investors considering the broader macroeconomic landscape. The ability of these funds to adapt to changing economic conditions will be a critical factor in their long-term viability and attractiveness to investors seeking to navigate the complexities of the current economic environment.
Launch Expands Lineup with Fixed Income-Focused ETF and Adds Small Cap Exposure to Shareholder Yield ETF Suite
“The Cambria Micro and Small Cap Shareholder Yield ETF (MYLD) provides exposure to smaller market cap stocks by ranking dividend yield and net shareholder buybacks along with value and quality factors,” said Meb Faber, co-founder and CIO of Cambria. “MYLD joins the original Cambria Shareholder Yield ETF (SYLD), Cambria Foreign Shareholder Yield ETF (FYLD) and Cambria Emerging Shareholder Yield ETF (EYLD) in rounding out Cambria’s shareholder yield suite. Its focus on potentially inefficient and generally under-covered small and micro-cap stocks with quality characteristics make it a compelling proposition for investors interested in both value exposure and yield alike.”
Cambria Micro and Small Cap Shareholder Yield ETF (MYLD) systematically focuses on high-cash distribution companies that are returning cash to investors through three attributes - dividends, buybacks, and debt paydown - collectively known as shareholder yield. The fund’s process further emphasizes valuation and quality metrics. MYLD’s universe consists of
“The Cambria Tactical Yield ETF (TYLD) is a dynamic approach to traditional fixed income that makes conservative exposure to Treasuries its baseline but increases exposure to other bond sectors when spreads relative to
Cambria Tactical Yield ETF (TYLD) focuses on fixed income securities based on yield spreads. TYLD targets a universe that includes
Cambria Shareholder Yield ETF (SYLD), Cambria’s first shareholder yield ETF, exceeded
The Cambria Shareholder Yield ETF ranked #1 out of 334 funds in the Morningstar Mid-Cap Value Category on an absolute, total return basis over the 10-year period as of 12/31/2023.
The Cambria Shareholder Yield ETF ranked #1 out of 382 funds in the Morningstar Mid-Cap Value Category on an absolute, total return basis over the 5-year period as of 12/31/2023.
The Cambria Shareholder Yield ETF ranked #7 out of 393 funds in the Morningstar Mid-Cap Value Category on an absolute, total return basis over the 3-year period as of 12/31/2023.
The Cambria Shareholder Yield ETF ranked #86 out of 400 funds in the Morningstar Mid-Cap Value Category on an absolute, total return basis over the 1-year period as of 12/31/2023.
“Like all Cambria ETFs, these new ETFs provide investors with low-fee, compelling value propositions with multiple applications across different types of portfolios,” summed up Faber. “The Cambria team is thrilled to add them to our roster.”
In addition to Cambria’s family of ETFs, Faber also puts out a range of content for investors, including a popular investment podcast, The Meb Faber Show, along with white papers and books on investing.
About Cambria
Cambria Investment Management, LP ("Cambria" or the "Company") is a SEC registered investment advisor that was formed in 2006. Cambria is an independent, privately owned investment advisory firm focused on quantitative asset management and alternative investments. The Company's mission is to preserve and grow capital by producing above-average absolute returns with low correlation to traditional assets and manageable risk. Cambria investment portfolios and ETFs cover equity-focused strategies, global asset allocation, tail risk, hedged equity, and thematic strategies. The firm manages 14 different ETFs and had roughly
To determine if this Fund is an appropriate investment for you, carefully consider the Fund's investment objectives, risk factors, charges and expense before investing. This and other information can be found in the Fund's full or summary prospectus which may be obtained by calling 855-383-4636 (ETF INFO) or visiting our website at www.cambriafunds.com. Read the prospectus carefully before investing or sending money.
The Cambria ETFs are distributed by ALPS Distributors Inc., 1290 Broadway, Suite 1000,
On June 1, 2020 the Cambria Shareholder Yield ETF, changed its investment objective and investment strategy. The fund also changed from being passively managed to actively managed on that date.
ETFs are subject to commission costs each time a “buy” or “sell” is executed. Depending on the amount of trading activity, the low costs of ETFs may be outweighed by commissions and related trading costs.
Shares are bought and sold at market price (closing price) not net asset value (NAV) are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined), and do not represent the return you would receive if you traded at other times. Buying and selling shares will result in brokerage commissions. Brokerage commissions will reduce returns.
There is no guarantee that the Fund will achieve its investment goal. Investing involves risk, including the possible loss of principal. High yielding stocks are often speculative, high risk investments. The underlying holdings of the fund may be leveraged, which will expose the holdings to higher volatility and may accelerate the impact of any losses. These companies can be paying out more than they can support and may reduce their dividends or stop paying dividends at any time, which could have a material adverse effect on the stock price of these companies and the Fund’s performance. International investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Investments in smaller companies typically exhibit higher volatility. Narrowly focused funds typically exhibit higher volatility.
The Fund is managed using proprietary investment strategies and processes. There can be no guarantee that these strategies and processes will produce the intended results and no guarantee that the Fund will achieve its investment objective. This could result in the Fund’s underperformance compared to other funds with similar investment objectives.
There is no guarantee dividends will be paid. Diversification may not protect against market loss.
There are special risks associated with margin investing. As with stocks, you may be called upon to deposit additional cash or securities if your account equity declines.
Indicative value (iNAV) is a measure of the intraday net asset value (NAV) of an investment. It is reported approximately every 15 seconds and gives investors a measure of the value of the investment throughout the day.
© 2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
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Tyler Bradford
Hewes Communications
Office: 212-207-9454
tyler@hewescomm.com
Source: Cambria Investment Management
FAQ
What are the new active ETFs launched by Cambria Investment Management?
What is the focus of Cambria Micro and Small Cap Shareholder Yield ETF (MYLD)?
What is the focus of Cambria Tactical Yield ETF (TYLD)?
How does Cambria Shareholder Yield ETF (SYLD) perform in Morningstar rankings?
What kind of content does Meb Faber put out for investors?
