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Cambria Launches ETF Focused on Dividends, Debt Paydowns, and Share Buybacks

Guggenheim to close a dim sum bond ETF, and updated filings on proposed emerging-markets ETFs from Emerging Global Advisors and Krane Funds. Plus, the week's best- and worst-performing funds.

Robert Goldsborough, 05/20/2013

On May 14, Cambria Investment Management, which subadvises the AdvisorShares-issued, actively managed exchange-traded fund Cambria Global Tactical ETF GTAA, rolled out an actively managed ETF of its own.

Cambria Shareholder Yield ETF SYLD is the first of what appears to be a planned suite of "shareholder-yield" ETFs from the firm. Research by Cambria's chief investment officer Mebane Faber shows that dividend yields alone may not be the best predictor of companies' performance. Instead, Faber's research suggests that companies ranking highly on a combination of three factors--dividends, share repurchases, and debt paydowns--tend to provide better overall shareholder yields than those solely with high dividend yields.

With that in mind, the new fund taps a quantitative algorithm to help select 100 U.S. small-, mid-, and large-cap companies that rank highly on all three shareholder-yield components. SYLD's managers also employ active management to ensure that the fund never overconcentrates in any one sector. They also rate potential holdings on value, quality, and momentum factors.

The ETF charges 0.59%.

Cambria also plans to roll out two other actively managed "shareholder-yield" ETFs focused on foreign stocks and emerging-markets stocks.

Guggenheim to Shutter Yuan Bond ETF
On May 15, Guggenheim announced plans to close a small, thinly traded ETF that holds yuan-denominated bonds traded outside of mainland China, or "dim sum bonds."

Guggenheim Yuan Bond ETF RMB rolled out in September 2011 during a period of significant issuer interest in dim sum bonds. Because China restricts foreign investors from investing in domestic Chinese debt, foreigners can gain that exposure through dim sum bonds, which are issued in Hong Kong. The Chinese government introduced dim sum bonds, which are issued by Chinese and non-Chinese corporations and governments, as part of the Chinese government's efforts to internationalize its currency.

Robert Goldsborough is an ETF Analyst at Morningstar.

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