Daily ETF Watch: Cambria Debuts New Fund

Newly launched ETF adopts a quantitative momentum strategy.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Cambria Funds has added another ETF to its lineup that will adopt an actively managed quantitative strategy that targets momentum.

Cambria has three other funds currently trading, one actively managed and two based on in-house indexes. Those, however, are focused on shareholder yield and value.

The Cambria Global Momentum ETF (GMOM) is a fund of funds that can invest in other exchange-traded products, including ETNs, REITs and closed-end funds, in addition to traditional ETFs, according to the prospectus. It selects its components via a quantitative process that screens potential investment vehicles for momentum and trend factors.

It is basically a “go anywhere” type of fund and can invest in foreign and domestic equity and fixed-income securities, as well as commodities, currencies and derivatives.

Typically, GMOM will have at least 40 percent of its portfolio invested in securities from issuers representing at least three different countries, including the U.S., the prospectus said. It also noted that foreign issuers with significant restrictions for U.S. investors are excluded from consideration.

The prospectus says that the fund could experience high turnover because it rebalances to its target allocations on a monthly basis.

There doesn’t appear to be any other actively managed momentum-focused ETFs currently trading, and none of the index-based funds cover anywhere near the scope of GMOM in terms of geography or asset class.

The largest momentum ETF currently trading is the PowerShares DWA Momentum ETF (PDP | B-54), which has roughly $1.4 billion in assets under management; however, it only covers large- and midcap domestic equities. It has an expense ratio of 0.74 percent, or $74 for each $10,000 invested.

GMOM comes with an expense ratio of 0.94 percent.

 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.