Cambria Emerging Shareholder Yield ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in quality exposure and yield exposure compared with category peers. High quality exposure is attributed to stocks with low financial leverage and strong returns on equity. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm a Below Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

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Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Cambria Emerging Shareholder Yield ETF earns a High Process Pillar rating. 

The leading factor in the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The firm's five-year retention rate of 100% also contributes to the process. The parent firm's five-year risk-adjusted success ratio of 88% supports the rating. The measure indicates the percentage of a firm's funds that survived and surpassed their respective category's median Morningstar Risk-Adjusted Return for the period. Their commendable success ratio suggests that this firm does well for investors and that this fund may benefit from that.

 This strategy leans toward smaller, more undervalued companies compared with its average peer in the Diversified Emerging Mkts Morningstar Category. Examining additional factor exposure, this strategy has consistently favored high-quality stocks, including those with low financial leverage and solid returns on equity, compared with Morningstar Category peers during recent years. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. In recent months, the strategy was more exposed to the Quality factor compared with its Morningstar Category peers as well. The managers have also tended to overweight yield during recent years, shown by the portfolio's high exposure to dividends or buybacks. Stocks with high yields can be more stable, mature companies, but at times extreme market pressure or fundamental deterioration may prompt them to cut their dividends, which tends to hurt stock performance. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. Such exposure tends to pay off when markets are hot and to be costly when they are not. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in energy and basic materials relative to the category average by 14.0 and 3.9 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and communication services, underweight the average by 7.9 and 7.1 percentage points of assets, respectively. The portfolio is positioned across 107 holdings and is diversified among those holdings. In its most recent portfolio, 20.7% of the fund’s assets were concentrated in the top 10 fund holdings, compared to the category’s 25.3% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 43% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

High

Process

Cambria Emerging Shareholder Yield ETF's sole listed portfolio manager has not yet proven they have a competitive advantage over others in the industry, leading to an Average People Pillar rating. Mebane T. Faber brings over 17 years of portfolio management experience to the table. Across strategies managed, Faber has an average Morningstar Rating of 3.3, indicating above-average risk-adjusted performance.  Isolating the analysis to the fund at hand, Mebane Faber has delivered superior performance, outperforming both the category benchmark and average category peer for the past seven-year period. 

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

Average

People

Cambria Investment Management is a small, niche exchange-traded fund provider that adequately serves its investors but carries considerable key-person risk, and recent changes raises questions.

Cambria focuses on active, systematic-equity and asset-allocation strategies that differentiate it from larger ETF firms. The firm’s ETF lineup is unique, with a focus on yield-, momentum-, and value-oriented funds as well as more-specific options such as its Cannabis ETF. Few of the firm’s 12 ETFs hold significant assets under management—its largest by far is Cambria Shareholder Yield, with USD 760 million in assets under management. The funds are priced well. Cambria hasn’t merged or liquidated funds but repurposed two since it entered the ETF business in 2013. It has also registered, but not yet launched, additional ETFs, and it’s unclear when they will be available.

Co-founder, majority owner, CEO, and CIO Meb Faber maintains a public profile that drives a notable investor following, underlining considerable key-person risk at the firm. Although Faber is largely detached from the operational aspects of the small firm, he sets the firm’s direction and is one of three investment professionals who support Cambria’s strategies (and serves as their only named portfolio manager). Cambria will add Toroso Investments as a subadvisor to its suite of ETFs effective Sept. 1, 2023. Toroso’s cofounder and CIO, Michael Venuto, had been an independent trustee on Cambria’s three-person ETF board since 2019. Venuto abstained from voting on the Toroso hire and recently resigned from the board. Although Cambria’s choice of Toroso to implement its funds’ portfolio construction is reasonable, the decision nonetheless raises questions.

Below Average

Parent

Cambria Emerging Shareholder Yield ETF

EYLD is actively managed to invest in emerging market stocks focused on shareholder yield, as measured by dividend payments and net share buybacks.

EYLD's portfolio is well-diversified, with exposure to various countries and industries, but it is overweight in energy, industrials, and materials.

EYLD: Emerging Market Value ETF, Good 5.3% Yield, And Index Outperformance

Cambria Emerging Shareholder Yield ETF is an actively managed ETF with a quantitative model combining shareholder yield and value. It is well-diversified across sectors and holdings, but overweight in China-Taiwan. EYLD beats the emerging markets benchmark regarding valuation, earnings growth, dividend growth, and return.

EYLD: Best Of Breed Emerging Markets ETF

High dividend ETFs are not performing well in the US, but are performing nicely in emerging markets. The Cambria Emerging Shareholder Yield ETF focuses on shareholder yield: it doesn't look only at dividends, but also on buybacks, and net debt reduction. EYLD offers a strong combination of a high dividend yield (7%), a cheap valuation and a strong momentum.

EYLD: An Interesting 7% Yielding Emerging Market Shareholder Yield ETF

EYLD invests in emerging market equities with strong shareholder yields. Income is strong, valuations low, and performance reasonably good.

EYLD: 6% Dividend Yield, Improved Fundamentals, Cheap Valuation - Buy

Cambria Emerging Shareholder Yield ETF (EYLD) focuses on dividend yield. EYLD eschews typical total return goals in favor of dividend yields, somewhat like a bond fund.

EYLD: Seeking Stability In An Unstable Market

EYLD is an actively-managed fund investing in about one hundred or at times fewer emerging market equities exhibiting quality and value characteristics. The concept of the shareholder yield applied by EYLD is based on dividends, share repurchases, and debt reduction. Another way of saying, EYLD favors cash-rich, efficient EM companies.

EYLD: Solid Cash-Centered Strategy With EM Specific Risks

EYLD invests in emerging market equities with strong shareholder yields, meaning dividends plus share buybacks. Shareholder yields are an important, but somewhat overlooked, valuation metric. Companies with strong shareholder yields have a track-record of overperformance.

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