Mebane Faber’s Cambria Investment Management today introduced its third exchange traded fund, the Cambria Global Value ETF (NYSEArca: GVAL).
Passively managed GVAL, which carries an annual expense ratio of 0.69%, holds 99 stocks from the world’s “eleven most undervalued developed and emerging countries, as determined by the index provider,” according to a statement.
GVAL tracks the Cambria Global Value Index, which starts with a universe of 45 developed and emerging markets, including Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, Morocco, the Netherlands, New Zealand, Norway, Peru, Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, the U.S. and the U.K., according to Cambria.
Countries currently represented in GVAL are Greece, Russia, Ireland, Hungary, Spain, Austria, Brazil, Czech Republic, Israel, Italy and Portugal.
Faber believes analysts and investors should focus more on a country’s long-term valuation metrics, such as the cyclically adjusted price earnings ratio in an effort to find value and avoid potential bubbles at the country level, points he highlights in his upcoming book, “Global Value: How to Spot Bubbles, Avoid Crashes and Earn Big Returns in the Stock Market.”
Seven countries – Brazil, Ireland, Austria, Italy, Portugal, Spain and Israel – receive 10% allocations n GVAL. A combined 86% of the new ETF’s weight is allocated to large- and mid-caps. Financial services is by far GVAL’s largest sector weight at 28%. Materials and utilities combine for another 28%, according to Cambria data.
Cambria’s most recent launch prior to GVAL was the Cambria Foreign Shareholder Yield ETF (NYSEArca: FYLD), which started trading in December. FYLD tracks the Cambria Foreign Shareholder Yield Index, which is comprised of foreign developed stocks with high cash distribution characteristics. [High Yields and Foreign Stocks]
GVAL Country Allocation