Cambria Foreign 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 cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy's investment process inspires confidence and earns an Above Average 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.

Analyst Rating

Rio Tinto plc Sponsored

Credit Suisse

SES AI Corp

Montrose Environmental Group, Inc.

Score Media and Gaming

Golden Ocean Group

TotalEnergies SE

NextNav

Suncor Energy

Canadian Natural Resources

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 Foreign Shareholder Yield ETF earns an Above Average Process Pillar rating. 

The main contributor to the rating is the fund's excellent 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 parent firm's five-year risk-adjusted success ratio of 88% also contributes to the process. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Their respectable success ratio suggests that the firm does well for investors and that this fund may benefit from that. Lastly, the process is limited by the small size of its portfolio management team of one.

 This strategy, over time, has consistently held more undervalued companies, compared with peers in the Foreign Small/Mid Value Morningstar Category. But in terms of size exposure, it is similar to the average. Looking at 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. Though it may trail peers during an economic boom, this orientation contributes to helping it weather periods of economic stress better. In recent months, the strategy was more exposed to the Quality factor compared with its Morningstar Category peers as well. This strategy has also displayed a tendency to hold more companies with high dividend or buyback yields than peers over recent years. 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. Additionally, this strategy has demonstrated a preference for high-momentum stocks in these years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In this month, the strategy also had more exposure to the Momentum 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 financial services relative to the category average by 12.8 and 8.4 percentage points, respectively. The sectors with low exposure compared to category peers are consumer cyclical and healthcare, underweight the average by 7.4 and 6.8 percentage points of assets, respectively. The portfolio is composed of 103 holdings and is about as top-heavy as the category average, with 14.9% of assets in the top 10 holdings. And finally, in terms of portfolio turnover, looking at year-over-year movements, 34% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

Cambria Foreign Shareholder Yield ETF's sole listed portfolio manager has proven themself as effective as the next manager, 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 10-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 Foreign Shareholder Yield ETF

FYLD is actively managed to invest in Developed Ex-US stocks with focus on shareholder yield, as measured by dividend payments and net share buybacks.

Cambria Foreign Shareholder Yield ETF uses a unique investment rule called Shareholder Yield to select companies. FYLD has not produced significant returns compared to other ETFs run by Cambria. Shareholder Yield focuses on dividends, buybacks, and debt reduction.

FYLD: Searching For Income Via Shareholder Yield

Cambria Foreign Shareholder Yield ETF is an actively managed fund invested in ex-U.S. developed markets. The FYLD ETF follows a systematic, quantitative model to select stocks based on shareholder yield and value metrics. FYLD has outperformed competitors in the last 5 years and offers an attractive yield close to 6%.

FYLD: An Appealing Combination Of Yield, Valuation And Performance

Utilizing the concept of shareholder yield, FYLD captures the top-quality corner of the developed-world equity spectrum, excluding the U.S. It is tough to argue against investing in such a promising vehicle, especially assuming it is trading with a P/E of about 6.77x and a dividend yield of 6.9%. The flip side here is that its excess returns are either minimal (if compared to developed-world baskets) or nonexistent (if compared to the S&P 500 index).

FYLD: Beautiful Cash-Centered Strategy But Bleak Returns

Cambria Foreign Shareholder Yield ETF has generated strong yield and a good average total return over the long run. It also has outperformed the returns of S&P 500 over the past six months. During the short run, most of FYLD's top investments in the industrial, financial, energy, and materials sectors generated double-digit price growth.

FYLD: Portfolio Of Dividend-Paying Growth And Value Stocks Delivering Results

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News for Cambria Foreign Shareholder Yield ETF ETF (FYLD)