Cambria Large Cap Shareholder Yield ETF (LYLD) seeks to track an index that measures large-cap U.S. companies based on their total shareholder yield, which combines dividend payments and share buybacks as a percentage of market capitalization. This income-focused equity ETF targets firms returning the most cash to shareholders through both traditional dividends and stock repurchases.
How It Works
LYLD uses a rules-based methodology that screens large-cap U.S. stocks and weights them by their total shareholder yield rather than market capitalization. The fund calculates each company's combined dividend yield and net share buyback yield, then allocates higher weights to firms with the highest total cash returns to shareholders. Holdings are rebalanced quarterly to maintain alignment with changing shareholder yield metrics. The strategy typically holds 50-100 large-cap positions with moderate concentration in the top holdings.
Key Features
- Unique shareholder yield weighting captures both dividends and buybacks, providing broader income exposure than dividend-only strategies
- Recently launched in July 2024, offering a fresh approach to large-cap income investing with modern methodology
- 2.25% dividend yield provides current income while targeting companies actively returning cash to shareholders
Risks
- This ETF can lose value if companies reduce dividends or halt buyback programs during economic downturns, eliminating the fund's core selection criteria
- High-yielding stocks often underperform during growth markets when investors favor capital appreciation over income, potentially lagging broad market returns
- Large-cap equity exposure means potential 20-30% declines during bear markets, though dividend-focused stocks may provide some downside cushion
Who Should Own This
Best suited as a satellite holding (10-25% of equity allocation) for income-focused investors with 3+ year time horizons seeking current yield plus capital appreciation. Medium risk tolerance required due to equity volatility. Ideal for investors wanting exposure to shareholder-friendly companies beyond traditional dividend stocks, particularly in taxable accounts where buybacks offer tax advantages.