Cambria Global Value ETF (GVAL) seeks to track the Cambria Global Value Index, which identifies undervalued companies worldwide using quantitative value metrics including price-to-book, price-to-earnings, and price-to-cash-flow ratios. This international value equity ETF provides exposure to developed and emerging market stocks trading at discounts to their fundamental values.
How It Works
GVAL uses a rules-based, quantitative approach that screens global stocks for value characteristics, ranking companies by composite value scores across multiple metrics. The fund employs equal weighting among selected securities rather than market-cap weighting, providing more balanced exposure to smaller value opportunities. Holdings are rebalanced quarterly to maintain equal weights and capture new value opportunities. The strategy typically holds 100-200 stocks across developed and emerging markets, with country and sector allocations driven by where value opportunities emerge.
Key Features
- Equal-weighted approach provides more balanced exposure to value opportunities versus market-cap weighted international value alternatives
- Quantitative screening process removes emotional bias, systematically identifying undervalued stocks across global markets using multiple value metrics
- Relatively new ETF launched in 2018 with 2.19% dividend yield reflecting focus on income-generating value stocks
Risks
- This ETF can lose value if value investing falls out of favor, as growth stocks have significantly outperformed value stocks in recent years
- Equal weighting increases exposure to smaller, less liquid international stocks that may experience higher volatility during market stress periods
- International exposure creates currency risk where strengthening U.S. dollar reduces returns from foreign holdings, potentially causing 10-20% additional volatility
Who Should Own This
Best suited as a satellite holding (10-25% of equity allocation) for patient value investors with 5+ year time horizons willing to endure extended periods of underperformance. Medium-to-high risk tolerance required due to value investing's cyclical nature and international equity volatility. Appropriate for investors seeking diversification from U.S. growth-heavy portfolios.