For example, the Cambria Global Value ETF (NYSEArca: GVAL) passively tracks the Cambria Global Value Index, which consists of stocks with strong value characteristics. Specifically, the ETF follows the top 25% of countries based on long0term valuation metrics, a CAPE ratio in the high single digits, top 30 stocks in each country by market cap and top 10 stocks across valuation composite, like price/sales, price/book and dividends. The fund’s holdings are also somewhat equally weighted. [An Active ETF That Targets Global Bargains]
“We think investors should be size-agnostic,” Faber added. “At some points in the business cycle, small caps can be a much better opportunity than large caps, and vice versa. Now is not one of those times in the U.S. for small caps, and most of the value we are finding is in mid-cap and large-cap stocks.”
GVAL’s market-cap allocations include mega-caps 14.9%, large-caps 23.6%, mid-caps 31.8%, small-caps 24.9% and micro-caps 4.8%. The ETF is up 6.1% over the past three months and comes with a 0.69% expense ratio.
For more information on index-based ETFs, visit our indexing category.
Max Chen contributed to this article.