VAMO Investment Case

Strategy Overview

The Cambria Value and Momentum ETF (NYSE: VAMO) utilizes a quantitative approach to actively manage a portfolio of domestic equities. Value factors have long been emphasized by investors as key predictors of a company’s strength. Likewise, momentum factors have historically been complementary to a portfolio sorted on value. Value and Momentum combines the two factors and additionally can tactically hedge the equity portfolio with strict risk control methods that are completely systematic. The manager believes that a focus on all three factors – value, momentum, and tactical hedging, produces a portfolio of companies that offer strong characteristics, with the potential added benefit of lower volatility and protecting against market downturns.

Fund Description

The Cambria Value and Momentum ETF (the “Fund”) seeks to preserve and grow capital from investments in the U.S. equity markets. Specifically, VAMO invests in 100 stocks with market caps greater than US $200 million that rank among the highest in value factors, as well as momentum factors. The Fund then has the ability to hedge up to 100% of the portfolio based on top down objective assessments of stock valuations and market trends.

Why Invest in VAMO

  • Classic Investment Approach - Two long-held pillars of investing provide that investors should buy the assets of cheap companies (value) that exhibit trailing outperformance over a medium term timeframe (momentum). The VAMO portfolio intends to invest in the top 100 stocks of what Cambria identifies as the least expensive stocks with the best momentum characteristics in the United States.
  • Combining Top Down Hedging - One challenge of investing is that a long only exposure can expose the investor to long bear markets. VAMO allows the investor to hedge the equity portfolio when the market is expensive or in a downtrend, or both. The Fund will scale the hedges up and down on a weekly basis.
  • Removing Emotional Decision Making - One of the difficulties of investing is the ability to stay the course when markets are volatile. The Cambria Value and Momentum ETF rebalances monthly, and hedges updated weekly, with systematic rules for entry and exit 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 VAMO 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.
  • 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, and transparency of holdings, lower expense ratio, and a single-share investment minimum, all underlying Cambria’s actively managed, risk-controlled portfolio design.

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. Check the background of ALPS on FINRA's BrokerCheck.

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 Read the prospectus carefully before investing or sending money.

The Cambria Sovereign Bond ETF was formerly known as The Cambria Sovereign High Yield Bond ETF.

EYLD, FYLD, GAA, GMOM, GVAL, SOVB, SYLD, TAIL, TOKE, TRTY, and VAMO are actively managed using proprietary investment strategies and processes. There can be no guarantee that these strategies and processes will produce the intended results and no guarantee that the Fund will achieve its investment objective. This could result in the Fund's underperformance compared to other funds with similar investment objectives.

ETFs are subject to commission costs each time a "buy" or "sell" is executed. Depending on the amount of trading activity, the low costs of ETFs may be outweighed by commissions and related trading costs. Shares are bought and sold at market price (closing price) not net asset value (NAV) are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined), and do not represent the return you would receive if you traded at other times.

There is no guarantee that the Fund will achieve its investment goal. Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from social, 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. Bonds and bond funds are subject to interest rate risk and will decline in value as interest rates rise.

Investments in sovereign and quasi-sovereign debt obligations involve special risks not present in corporate debt obligations. The issuer of the sovereign debt or the authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when due, and the Fund may have limited recourse in the event of a default. Investments in commodities are subject to higher volatility than more traditional investments. The fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses. The use of leverage by the fund managers may accelerate the velocity of potential losses. The Fund employs a "momentum" style of investing that emphasizes investing in securities that have had higher recent price performance compared to other securities. This style of investing is subject to the risk that these securities may be more volatile than a broad cross-section of securities or that the returns on securities that have previously exhibited price momentum are less than returns on other styles of investing or the overall stock market. Investments in smaller companies typically exhibit higher volatility. Diversification may not protect against market loss. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.

Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Buying and selling shares will result in brokerage commissions. Brokerage commissions will reduce returns.

There are special risks associated with margin investing. As with stocks, you may be called upon to deposit additional cash or securities if your account equity declines.

On June 1, 2020, SYLD’s and FYLD’s investment objective and investment strategy changed. FYLD and SYLD went from being passively managed to actively managed on that same date.

On July 1, 2020, GVAL’s and EYLD’s investment objective and investment strategy changed. FYLD and SYLD went from being passively managed to actively managed on that same date.