EYLD: Fine Emerging Markets ETF With A Geopolitical Issue

seekingalpha06-13

Cambria Emerging Shareholder Yield ETF is an actively managed ETF focusing on shareholder yield and value in emerging markets.EYLD is well-diversified across sectors and holdings but has considerable ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nEYLD: Fine Emerging Markets ETF With A Geopolitical Issue\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-13 20:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4698931-eyld-fine-emerging-markets-etf-with-a-geopolitical-issue><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Cambria Emerging Shareholder Yield ETF is an actively managed ETF focusing on shareholder yield and value in emerging markets.EYLD is well-diversified across sectors and holdings but has considerable ...</p>\n\n<a href=\"https://seekingalpha.com/article/4698931-eyld-fine-emerging-markets-etf-with-a-geopolitical-issue\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FEM","symbol_name":"First Trust Emerging Markets AlphaDEX Fund","start_time":0,"source_url":"https://seekingalpha.com/article/4698931-eyld-fine-emerging-markets-etf-with-a-geopolitical-issue","article_id":"2443168806","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/157564362/image_157564362.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2443168806","pubTimestamp":1718280000,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Cambria Emerging Shareholder Yield ETF is an actively managed ETF focusing on shareholder yield and value in emerging markets.EYLD is well-diversified across sectors and holdings but has considerable ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FEM":"First Trust Emerging Markets AlphaDEX Fund","BK4588":"碎股","BK4504":"桥水持仓","PIE":"Invesco DWA Emerging Markets Momentum ETF","DGS":"新兴市场小盘红利股ETF-WisdomTree","EEM":"新兴市场ETF-iShares MSCI","BK4550":"红杉资本持仓","EYLD":"Cambria Emerging Shareholder Yield ETF","PXH":"Invesco FTSE RAFI Emerging Markets ETF","DEM":"新兴市场高股息ETF-WisdomTree","BK4585":"ETF&股票定投概念","BK4581":"高盛持仓","FDN":"First Trust Dow Jones Internet I","BK4534":"瑞士信贷持仓"},"translate_title":"EYLD：存在地缘政治问题的新兴市场ETF","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DEM":1,"DGS":1,"EEM":1,"EYLD":1,"FDN":1,"FEM":1,"PIE":1,"PXH":1,"US7Y.BOND":0.9,"US6M.BOND":0.9,"US5Y.BOND":0.9,"US3Y.BOND":0.9,"US30Y.BOND":0.9,"US2Y.BOND":0.9,"US12M.BOND":0.9,"US10Y.BOND":0.9,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,"US912797FS14.BOND":0.6},"content_text":"Cambria Emerging Shareholder Yield ETF is an actively managed ETF focusing on shareholder yield and value in emerging markets.EYLD is well-diversified across sectors and holdings but has considerable exposure to risks related to China (over 50% of assets).The Fund looks better than an Emerging Markets benchmark based on fundamentals and performance, and it has outperformed a number of competitors.EYLD is one of the best EM funds, but geopolitical risk is excessive.Juanmonino This article series aims at evaluating ETFs (exchange-traded funds) regarding past performance and portfolio metrics. Reviews with updated data are posted when necessary. EYLD strategy Cambria Emerging Shareholder Yield ETF (BATS:EYLD) is an actively managed ETF launched on 7/14/2016. It has a portfolio of 102 stocks, a 30-day SEC yield of 5.67%, and a total expense ratio of 0.64%. Dividends are paid quarterly. As described in the prospectus, EYLD invests in a list of emerging countries defined by Cambria. It focuses on companies that provide high \"shareholder yield,\" defined as the returns realized by an investor from a company's cash payments for dividends, buybacks and debt paydowns. The fund's portfolio is managed by Meb Faber, a well-known author of white papers and books. Among them, Shareholder Yield, A Better Approach to Dividend Investing, details fundamental and historical data on the shareholder yield concept. The fund follows a systematic, quantitative model, as described below. Cambria selects the top 20% of stocks in the initial universe of emerging market, publicly listed companies based on their shareholder yield, as measured by dividend payments and net share buybacks. Cambria's quantitative algorithm then factors in the remaining stocks' debt paydowns and applies a number of value metrics to create a composite, including metrics such as, but not limited to, price-to-book (P/B) ratio, price-to-sales (P/S) ratio, price-to-earnings(P/E) ratio, price-to-free cash-flow (P/FCF or P/CF) ratio, and enterprise multiple (EV/EBITDA). Cambria then selects the top 100 stocks for inclusion in the Fund's portfolio that exhibit, in the aggregate, the best combination of shareholder yield characteristics and value metrics. EYLD tends to an equal-weight methodology, but weights may vary with price action, market conditions and opportunities. Each country's weight is capped at 30% of assets. The portfolio turnover rate was 43% in the most recent fiscal year. This article will use as a benchmark iShares MSCI Emerging Markets ETF (EEM). Shareholder yield: a proof of concept I ran a simulation on Portfolio123 to evaluate the performance of a ranking system based on shareholder yield, represented by the following formula: (Dividend paid TTM + Equity Purchased TTM - Equity Issued TTM + Total Debt 12 months ago - Total Debt)/Market Capitalization The simulation is run by ranking stocks of the S&P 500 index in equal weight in 10 buckets from lower to higher shareholder yields. The next chart plots the excess return of the 10 buckets relative to the equal-weight S&P 500 index, starting in January 1999 with an annual rebalancing. Shareholder yield ranking system performance since 1999 (Portfolio123) This simulation shows an excess annualized return of 2.29% for the top decile (on the right). It is significant enough to validate on 25 years of historical data the concept of shareholder yield as a valuable investing factor in the U.S. The risk of generalizing the qualitative bias (not the numbers) to emerging markets (\"EM\") is moderate. However, like for all factors, the statistical bias may vary with time. For the last 2 years, the excess return is negative (next chart). Shareholder yield ranking system performance, last 2 years (Portfolio123) Portfolio EYLD has about 44% of asset value in large caps, 35% in mid-caps and 21% in small caps. The heaviest countries in the portfolio are Taiwan (29.8%) and China (20.3%). If we add Hong Kong, 51.4% of asset value has a direct exposure to geopolitical risks related to China. It is more than in EEM, where China and Taiwan have an aggregate weight of 44.9%. Compared to the benchmark, EYLD overweights mostly Taiwan and South Africa, and underweights China and India. The next chart lists the top 10 countries, which represent about 96.7% of assets. EYLD geographical allocation (chart: author; data: Fidelity, iShares) Energy is the heaviest sector with 15.8% of assets, followed by technology (13.2%) and financials (12.6%). Other sectors are below 7%. Compared to the benchmark, EYLD massively overweights energy, and underweights mostly technology, communication, financials and consumer discretionary. It ignores healthcare and real estate. EYLD sector breakdown (chart: author; data: Fidelity, iShares) The largest holding is a U.S. treasury fund: First American Treasury Obligations Fund (FXFXX), with a weight of 4.14%. Then, the top 10 stocks listed below represent 18.7% of asset value. The largest position weighs 2.8%, so risks related to individual companies are low.   Name Weight Ticker/exchange CUSIP   Hanmi Semiconductor Co Ltd 2.80% 042700 KS B0CSXQ8   CHINA SHENHUA ENERGY 2.00% 1088 HK B09N7M0   Chicony Electronics Co Ltd 1.97% 2385 TT 6140579   Truworths International Ltd 1.90% TRU SJ 6113485   ITE Technology Inc 1.82% 3014 TT 6548753   Asustek Computer Inc 1.71% 2357 TT 6051046   Enerjisa Enerji AS 1.68% ENJSA TI BD0MXB8   Huadian Power International Corp Ltd 1.64% 1071 HK 6142780   Yankuang Energy Group Co Ltd 1.61% 1171 HK 6109893   Oil India Ltd 1.56% OINL IN B409HQ9   Click to enlarge EYLD is significantly cheaper than EEM regarding valuation ratios, as reported in the next table. It also shows better growth rates (especially earnings growth), which is quite unusual for a value fund.     EYLD EEM   Price/Earnings 9.35 14.23   Price/Book 1.2 1.67   Price/Sales 0.81 1.45   Price/Cash Flow 6.3 9.09   Earnings Growth 26.96% 16.58%   Sales Growth 5.07% 4.98%   Cash Flow Growth 3.40% 2.25%   Click to enlarge Source: Fidelity website. Historical performance Since 8/1/2016, the Cambria fund has outperformed EEM by 4.4% in annualized return. It shows a higher risk in drawdown and volatility, but beats the benchmark by a wide margin in risk-adjusted performance (Sharpe ratio).     Total Return Annual Return Drawdown Sharpe ratio Volatility   EYLD 90.54% 8.54% -44.06% 0.46 17.97%   EEM 37.76% 4.16% -39.82% 0.2 17.47%   Click to enlarge The gap over the last 12 months is particularly impressive (19%): EYLD vs EEM, trailing 12 months (Seeking Alpha) The annual sum of distributions has been quite uneven, as reported on the next chart. However, it has increased from $0.96 per share in 2017 to $1.74 in 2023. This 6-year growth rate of 81% has outpaced EEM distributions (19% growth in the same time) and the cumulative inflation (24% based on CPI). EYLD distribution history (Seeking Alpha) EYLD vs. competitors Based on its yield, strategy and valuation, EYLD is both a dividend and a value ETF. The next table compares its characteristics to five factor-based emerging markets ETFs:  WisdomTree Emerging Markets SmallCap Dividend Fund (DGS) WisdomTree Emerging Markets High Dividend Fund (DEM) Invesco FTSE RAFI Emerging Markets ETF (PXH) First Trust Emerging Markets AlphaDEX Fund (FEM) Invesco Dorsey Wright Emerging Markets Momentum ETF (PIE).      EYLD DGS DEM PXH FEM PIE   Inception 7/13/2016 10/30/2007 7/13/2007 9/27/2007 4/18/2011 12/28/2007   Expense Ratio 0.66% 0.58% 0.63% 0.49% 0.80% 0.90%   AUM $412.66M $2.41B $2.87B $1.25B $444.50M $128.85M   Click to enlarge EYLD is the most recently launched and its expense ratio is average compared to peers. The next chart compares total returns since 7/18/2016. EYLD is leading by a significant margin: it is 22% ahead of DGS, which comes in second position. EYLD vs. competitors, since inception in 2016 (Seeking Alpha) It is also the best performer over the last 12 months: EYLD vs. competitors, 12-month return (Seeking Alpha) Takeaway  Cambria Emerging Shareholder Yield ETF is an actively managed ETF with a rules-based methodology combining shareholder yield and value. EYLD is well-diversified across sectors and holdings, but has a considerable exposure to risks related to China (over 50%). The Cambria fund looks better than an EM benchmark based on valuation, fundamental growth, dividend growth and historical performance. It has outperformed a number of factor-based emerging markets ETFs. In summary, EYLD is one of the best EM funds, but like for many of them, geopolitical risk is excessive.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2443168806"}