A sound investment process and strong management team underpin Cambria Micro and Smcp Shld Yld ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's effective investment philosophy supports a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in momentum exposure and quality exposure compared with category peers. Momentum exposure is attributed to holding stocks currently on a winning streak and selling those that are on a downtrend. And a high quality exposure is rooted in holding stocks with low financial leverage and strong returns on equity. The strategy’s management team earns an Above 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

Perdoceo Education

REV Group

Immersion

Jackson Financial

International Seaways

LSB Industries

Dorian LPG

Genco Shipping & Trading

Liberty Oilfield Services

Sinclair Broadcast Group

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 Micro and Smcp Shld Yld ETF earns a High Process Pillar rating. 

The main contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 88%. 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. The firm's five-year retention rate of 100% also contributes to the process. The parent firm's superior risk-adjusted performance, as shown by its average overall Morningstar Rating of 3.4 stars, influences the rating as well.

 This strategy skews toward smaller, more value-oriented companies compared with its average peer in the Small Value Morningstar Category. Analyzing additional factors, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last few years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy also has had a position favoring high-quality stocks in recent years, which could contribute to higher downside risk protection. Such holdings could cause it to trail peers during economic booms, but help it better withstand busts. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than 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 financial services relative to the category average by 6.4 and 5.2 percentage points, respectively. The sectors with low exposure compared to category peers are real estate and technology, underweight the average by 5.2 and 4.9 percentage points of assets, respectively. The portfolio is composed of 102 holdings and is less top-heavy than peers. Specifically, 10.3% of the portfolio's assets are concentrated within the top 10 fund holdings, compared to the typical peer's 28.9%.

High

Process

Cambria Micro and Smcp Shld Yld ETF earns an Above Average People Pillar rating. Mebane T. Faber’s veteran status, with 17 years of listed portfolio management experience, brings a wealth of experience to the table. The average Morningstar Rating of the strategies they currently manage is 3.3 stars, demonstrating average risk-adjusted performance. The team is small but adequately equipped, with only one other supporting manager. Together, the two listed managers have nine years of average listed portfolio management experience. As a team, they manage two investment vehicles together, with a Gold asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha in aggregate. None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders. 

 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.

Above 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 Micro and SmallCap Shareholder Yield ETF

MYLD offers active exposure to equity securities of micro- and small-sized companies in the US. Securities are selected based on shareholder yield characterized by dividends, net shares buybacks, and debt paydown.

Cambria Tactical Yield ETF

MANHATTAN BEACH, Calif.--(BUSINESS WIRE)--Cambria Investment Management announced the launch of Cambria Micro and Small Cap Shareholder Yield ETF (MYLD) and Cambria Tactical Yield ETF (TYLD).

News for Cambria Micro and SmallCap Shareholder Yield ETF ETF (MYLD)