Market Overview

Multiple Asset Classes In One New ETF

Multiple Asset Classes In One New ETF

Multi-asset exchange traded funds, as the name implies, deliver one-stop access to multiple asset classes. The funds in this category use different methodologies for delivering multi-asset exposure, and some are more efficient than others.

The new Cambria Trinity ETF (CBOE: TRTY), which debuted last week, has the makings of a truly efficient multi-asset fund.

Cambria's latest fund uses an ETF of ETFs structure, meaning its holdings are other ETFs. The fund follows the Cambria Trinity Index.

“The index employs a balanced, systematic approach to asset allocation, focusing on diversification, value investing and trend following,” according to California-based Cambria. “The Cambria Trinity ETF uses a buy and hold stategy that aims to produce a balanced, low-turnover portfolio of investable assets.”

Why It's Important

The new ETF holds 18 ETFs with weights ranging from 1.94 percent to 33.53 percent. Its member ETFs hail from nine issuers, including seven Cambria ETFs. The Cambria Global Momentum ETF (NYSE: GMOM) and the Vanguard Intermediate-Term Government Bond ETF (NASDAQ: VGIT) are the two largest holdings, combining for over 41 percent of the new ETF's roster.

In addition to traditional equity and fixed income exposure, the ETF's roster includes managed futures strategies, international equity funds and domestic and international real estate holdings.

The index “allocates approximately 16 percent of its portfolio to equity securities, 24 percent to fixed income securities, 44 percent to trend following strategies and 16 percent to other asset classes such as currencies and real assets, including commodities, listed derivatives and real estate,” according to ETF Trends.

What's Next

The Trinity ETF charges 0.66 percent per year, or $66 on a $10,000 investment. The fund has no management fee and the aforementioned expense ratio of 0.66 percent is a pass-through resulting from the fund's underlying holdings.

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