SYLD Investment Case

Strategy Overview

Free cash flow has long been emphasized by investors as a key predictor of a company’s strength. Companies that pay cash dividends, one indication of strong free cash flow, have historically outperformed the broader market. Focusing strictly on dividend payments, however, misses two key indicators of strong free cash flow: net share repurchases and net debt paydown. The manager believes that a focus on all three factors — dividend payments, net share repurchases and net debt paydown, a trio collectively known as shareholder yield — produces a portfolio of companies that offer strong free cash flow characteristics.

Fund Description

The Cambria Shareholder Yield ETF is an actively managed fund that employs the manager’s quantitative algorithm to select U.S. listed companies that show strong characteristics in returning free cash flow to their shareholders. Specifically, SYLD invests in 100 stocks with market caps greater than $200 million that rank among the highest in (a) paying cash dividends, (b) engaging in net share repurchases, and (c) paying down debt on their balance sheets.

Why Invest in SYLD

  • A Focus on Dividends Alone Misses the Broader Picture - Rather than just focusing on dividend payments alone, SYLD invests in U.S. listed stocks that couple strong dividend payments with share repurchases and debt paydown. The manager believes that selecting companies that show strength in all three dimensions is a superior methodology for identifying stocks that possess strong cash flows and that have the potential to reward shareholders with higher yields.
  • Share Repurchases have Outpaced Dividends - According to data compiled by Robert Shiller, in his book Irrational Exuberance (2009), over the past 70 years, companies have continued to pay a lower and lower percentage of their earnings in cash dividends. Due to tax treatment and regulatory changes in the 1980s, U.S. companies have shifted their payout mix to include more share buybacks, and according to research conducted by Jeremy Schwartz, in his February 2012 "Investment Insights" paper, seven out of the ten S&P 500 sectors in 2011 offered a higher yield resulting from share repurchases than resulting from cash dividend payments.
  • Classic Value Investment Approach - A long-held pillar of investment success provides that investors should buy the stocks of companies that exhibit strong free cash flows and return that cash to investors in the form of dividend yield. The SYLD portfolio has the potential benefit of investing in classic value companies that are also buying back their stock and reducing their debt.
  • Diversification - The fund offers a broad portfolio of US companies of different sizes, industries and sectors, providing investors with a diversified equity portfolio. The manager employs maximum sector percentage caps to ensure that the portfolio is not concentrated in any one sector.
  • Pioneering Product - SYLD is the first ETF to focus on the three factors we define as constituting shareholder yield -- dividend payments, share buybacks, and debt paydown. The prospectus covering SYLD also lists future shareholder yield ETFs focusing on foreign developed countries (Cambria Foreign Shareholder Yield ETF: FYLD) and emerging markets (Cambria Emerging Shareholder Yield ETF: EYLD).
  • Advantage of Active ETFs - Investors will receive the benefits and flexibility of the ETF vehicle, including the ability to be traded using limit and stop loss orders as well as on margin, intraday pricing, transparency of holdings, lower expense ratio, and a single-share investment minimum, all underlying Cambria's actively managed, risk-managed portfolio design.

To determine if this Fund is an appropriate investment for you, carefully consider the Fund's investment objectives, risk factors, charges and expense before investing. This and other information can be found in the Fund's full or summary prospectus which may be obtained by calling 855-383-4636 (ETF INFO) or visiting our website at www.cambriafunds.com. Read the prospectus carefully before investing or sending money.

The Cambria ETFs are distributed by ALPS Distributors Inc., 1290 Broadway, Suite 1000, Denver, CO 80203, which is not affiliated with Cambria Investment Management, LP, the Investment Adviser for the Fund.

Investing involves risk, including potential loss of capital.

SYLD: There is no guarantee that a Fund will achieve its investment goal. Investing involves risk, including the possible loss of principal. High yielding stocks are often speculative, high-risk investments. The underlying holdings of the Funds may be leveraged, which will expose the holding to higher volatility and may accelerate the impact of any losses. These companies can be paying out more than they can support and may reduce their dividends or stop paying dividends at any time, which could have a material adverse effect on the stock price of these companies and the Fund’s performance. International investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Investments in smaller companies typically exhibit higher volatility. Narrowly focused funds typically exhibit higher volatility.

SYLD is actively managed.

As of 9/30/2025 SYLD received a 3-star overall rating, 3 years a 1-star rating, 5 years a 3-star rating, and 10 years a 3-star rating based on risk adjusted returns out of 378, 378, 355, 285 funds respectively in the Mid Cap Value category.

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The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange traded-funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating / 40% three-year rating for 60-119 months of total returns, and 50% 10-year rating / 30% five-year rating / 20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Past performance is no guarantee of future results.