SYLD ETF

Cambria Shareholder Yield ETF is an actively managed fund selecting 100 securities from a universe of approximately 3,000 U.S. securities based on their shareholder yield, value, quality, and momentum characteristics. Since its strategy change on June 1, 2020, the SYLD ETF has delivered an outstanding 147% total return, trouncing peers like VFVA and FMDE. However, its recent results aren't very impressive. The reason is that SYLD is a niche product, likely best suited to periods of economic recovery, like the period immediately following the Q1 2020 pandemic crash.

SYLD has rallied so far in 2024 but has also underperformed the S&P 500 in 2024 amid relative weakness in areas away from megacap tech. The betting market predicts an 80% chance of a Fed rate cut in September, and lower interest rates could help companies with high total shareholder yields. SYLD remains a compelling value with the potential for equity market rotation favoring the total shareholder yield factor, and I point out key price levels on the chart to monitor.

Cambria Shareholder Yield ETF focuses on high-cash distribution companies returning cash to investors through dividends, buybacks, and debt paydown. SYLD targets an equal-weight portfolio of around 100 companies, historically trading at a discount. The strategy considers dividend payments, net share repurchases, and net debt paydown to select companies with strong free cash flow characteristics.

DIVB is an equity index ETF that focuses on U.S. equities with above-average dividend payments and share buyback programs. SYLD is a better option than DIVB, with a cheaper valuation and stronger performance track-record. An overview of DIVB, and comparison to SYLD, follows.

SYLD is a buy-rated ETF that focuses on companies returning cash to shareholders through dividends, buybacks, and net debt reduction. Global corporate buyback announcements have fallen dramatically, but actual share repurchase activity has increased. SYLD is a value fund with significant exposure to the Energy and Financials sectors, and its technical situation suggests a 'hold' call.

Cambria Shareholder Yield ETF is an actively managed fund that focuses on shareholder yield and value metrics. The SYLD fund's portfolio consists of 100 stocks, with a significant allocation to energy, materials, and financials sectors. SYLD has outperformed value ETFs in both small and large caps over the past 10 years and in 2023, making it attractive for value investors.

In June 2020, SYLD switched to an actively-managed fund, and has since become the top-performing ETF with a total market focus, delivering a 117% total return vs. 54% for SPY. SYLD's shareholder yield-focused portfolio currently results in high concentrations of commodity-linked stocks in the Energy and Materials sectors. It's a bet that inflation will run higher for longer. However, I'm not willing to take that bet today. SYLD performance ranks just #76/108 YTD, and it's currently a highly-volatile ETF with a 1.39 five-year beta.

The bull market of 2023 has created winners and losers, and investors should focus on areas that can take advantage of the bull market. Cambria Shareholder Yield ETF focuses on companies with strong free cash flow and returns capital to shareholders through dividends, debt pay down, and share repurchases. The SYLD ETF is expensive to own, underperforming the market, and lacks growth prospects, making it unsuitable for investors' portfolios.

Harnessing The Benefits Of Total Shareholder Yield With SYLD