New Active ETF Seeks To Capture Global Momentum
On Tuesday, Cambria Investment Management debuted a new actively managed ETF designed to capture global trends through quantitative screening. The Cambria Global Momentum ETF (NYSE: GMOM) will use a multi-asset approach on a worldwide scale to systematically select various investment opportunities according to recent momentum and trend performance.
GMOM will incorporate an underlying base of low-cost sector and broad-market ETFs as its primary portfolio tools. At launch this included 17 funds from a wide assortment of ETF providers and asset classes. More specifically, GMOM has a 65 percent weight to stocks, 29 percent in fixed-income and 6 percent in alternative assets.
One of the hallmarks of the GMOM portfolio is its risk management approach that allows the asset allocation mix to shift from a stock-heavy mix to bonds and cash. This typically occurs when high momentum sectors are trading below their long-term trends. Assets within the fund are evaluated and rebalanced on a monthly basis to ensure that the portfolio will adapt to changing conditions in an expedited manner.
GMOM will have a stated management fee of 0.59 percent along with acquired fund fees of 0.35 percent. Dividends will be paid on a quarterly basis to shareholders.
This style of ETF has become popular this year and joins the newly released GLOBAL X JPMorgan Efficiente Index ETF (NYSE: EFFE) as a global multi-asset play with a rules-based allocation methodology.
In addition, Cambria has several other popular strategies that include the Cambria Shareholder Yield ETF (NYSE: SYLD) and Cambria Foreign Shareholder Yield ETF (NYSE: FYLD). Both funds use algorithms to select domestic or foreign stocks according to characteristics that indicate they are returning value to shareholders. This may include cash dividends, share repurchases or paying down debt on their balance sheets.
The biggest appeal for GMOM will likely be to investors that want a single diversified investment vehicle for global growth with a healthy dose of risk management as well. Based on the success of Cambria’s other strategies, this ETF will certainly be one to watch as it builds a track record versus competitive offerings over the next several months.
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