Meb Faber Making Waves
In yesterday’s Daily ETF Watch column, we wrote at length about the Cambria Global Asset Allocation ETF (GAA), a fund-of-funds security that will have an expense ratio of 29 basis points, but no advisory fee.
That expense ratio is the sum of so-called acquired fund fees that reflect the collective cost of the 29 different ETFs that make up the security. What Meb Faber is not charging is the advisory fee for putting all those separate ETFs into one smoothly running exchange-traded wrapper.
Cambria’s waiving of its management fee is likely to get the attention of a variety of players in the ETF traffic. That includes robo advisors such as Wealthfront or Betterment that offer algorithmic riffs on buy-hold-and-rebalance index investing as well as ETF strategists that offer expertise in managing core-satellite-type ETF allocations. Both charge fees, ranging from 25 basis points a year to around 75 basis points.
GAA is an index fund that offers in one wrapper a global portfolio of stocks, bonds, commodities and real estate that is designed to, alone, represent an entire core asset allocation. GAA is a buy-and-hold version of more tactical approaches to global asset allocation, such as Cambria’s most recent fund, the actively managed Cambria Global Momentum ETF (GMOM).