Exchange Traded Funds (ETFs)

Invest in High Shareholder Yields with This Fund

The Cambria Shareholder Yield ETF (BATS:SYLD) offers active exposure to U.S. stocks with attractive cash flow characterized by dividends, share buybacks and net debt paydown.

SYLD actively selects U.S. stocks that exhibit high shareholder yield, which is calculated by considering a company’s cash flow measures. Selection starts with the top 20% of stocks by combining two popular themes: dividend payments and share buybacks.

The fund’s quantitative algorithm then factors in the debt paydowns of the remaining stocks and applies valuation factors. The top 100 stocks that represent the best combination of shareholder yield characteristics and value metrics form the final portfolio.

The fund equal weights its holdings during normal market conditions, and it is rebalanced and reconstituted quarterly. SYLD generally holds large-cap stocks but may invest in small- and mid-cap companies. Prior to March 26, 2018, the fund was actively managed, and before June 1, 2020, it tracked the Cambria Shareholder Yield Index.

Chart courtesy of StockCharts.com

As you can see in the chart above, the fund has done well over the trailing 12-month period, when its share price rose over 20%. In addition, it has a nice 1.42% dividend yield.

The fund has amassed $347 million in net assets. It has a 0.59% expense ratio, meaning its cost to own is on par with other exchange-traded funds in its group.

SYLD utilizes a quantitative approach to invest in U.S. equities with high cash distribution characteristics. The initial screening universe includes stocks in the United States with market capitalizations over $200 million.

The ETF is comprised of the 100 companies with the best combined rank of dividend payments and net stock buybacks, which are the key components of shareholder yield. It also screens for value and quality factors, including low financial leverage.

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As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.