Buybacks: Cambria Shareholder Yield ETF (SYLD)
Finally, we come to the most recent addition, the Cambria Shareholder Yield ETF (SYLD).
SYLD invests in 100 stocks with market caps greater than $200 million that rank among the highest in shareholder yield, which is calculated as a combination of cash dividends, share repurchases, and paying down debt.
The Cambria option is an interesting hybrid ETF. Share buybacks are one of only three criteria it considers when ranking stocks for shareholder friendliness. It has the most open mandate of the lot, as it has the ability to invest in foreign securities as well as American. SYLD, like TTFS, also blurs the lines between active and passive management.
In both cases, stock selection is mostly formulaic, though the manager maintains a good deal of discretion. In the case of SYLD, the manager chooses what he considers to be the top 100 stocks based on shareholder yield, as well as the portfolio weights. In order to avoid “value traps,” or cheap stocks that continue to get cheaper, the manager will generally wait until a potential stock is in an uptrend before buying.
Expenses for SYLD run 0.59%, making it the cheapest of the ETFs on our list.