Cambria Investment Management thinks it’s found a better way to invest in dividend paying stocks. The Los Angeles-based investment advisor introduced an actively managed ETF that aims for higher income using an equity screen it calls “shareholder yield.”
The Cambria Shareholder Yield ETF (SYLD) is composed of U.S. stocks that have historically ranked among the highest in paying cash dividends, participating in share buybacks and paying down debt. These three factors are collectively known as “shareholder yield.”
Research conducted by Mebane Faber, Cambria’s chief investment officer and author of The Ivy Portfolio (2011, Wiley) showed that focusing solely on dividends may result in suboptimal performance results for investors. Instead, Faber emphasizes an approach consisting of the three shareholder yield components. According to his studies, this strategy produced a portfolio of companies that possess stronger free cash flow characteristics and generated higher shareholder yields than their dividend-only counterparts.