Cambria Investment Management has launched a new alternative investment ETF providing actively managed exposure to global property markets through a multi-factor strategy.
Meb Faber, co-Founder and CIO, Cambria Investment Management.
The Cambria Global Real Estate ETF (BLDG US) has listed on Cboe BZX Exchange and comes with an expense ratio of 0.59%.
The fund seeks income and capital appreciation by investing in up to 100 real estate investment trusts (REITs) and other real estate management and development companies, as defined by GICS, listed globally.
Security selection is driven by a proprietary quantitative methodology that favours trusts and companies with strong value, quality, and momentum characteristics.
Cambria uses traditional metrics to define factor exposures. For value, this includes Price to Sales ratio, Price to Earnings ratio, Funds from Operations, dividend yield, and Enterprise Value/EBITDA; for quality, accruals and debt/asset ratios are used; and momentum is defined as trailing 12-month total returns.
As of 24 September, there were 72 holdings in the portfolio with more than half (57.0%) allocated to securities listed in the US with the next largest country exposures being Singapore (13.6%), Australia (6.4%), Malaysia (5.7%), and Canada (4.4%). Constituents are approximately equally weighted as of period portfolio rebalances.
The ETF, which pays dividends on a quarterly basis, may suit investors seeking income outside of conventional government and corporate securities which have seen their yields plummet amid the record-low interest rate environment.
The fund’s yield is not yet available; however, the $2.0bn iShares Global REIT ETF (REET US), the largest regular global real estate ETF, is currently yielding 3.8% (although this is also some way below the fund’s trailing 12-month yield of 6.2%). REET comes with an expense ratio of just 0.14%, although investors in the Cambria Global Real Estate ETF would naturally be expected to pay a premium to access the firm’s multi-factor approach to the property market.
Meb Faber, Cambria Co-Founder and CIO, commented, “Cambria is focused on offering quantitative, rules-based strategies that are unique alternatives to what is already available in the ETF marketplace. We view real estate as a core piece of the investment opportunity set, and BLDG offers investors global active exposure to real estate through a thoughtful, multi-factor approach focused on value, quality, and momentum. BLDG fits nicely with our firm’s mission of engineering ETFs that focus on absolute returns with low correlation to traditional assets.”