David Cohen

Meb Faber has been building Cambria Investments for over a decade from Manhattan Beach, California , a town far enough from L.A. that he can "still show up in the office in surf gear and flip flops." With about $2.5 billion in assets and 15 funds, Cambria is a quantitative, rules-based shop run by a former engineer with a biotech background. And his flagship shareholder yield strategy remains one of the most interesting orphans in the ETF space , a consistent outperformer that the industry has inexplicably refused to copy.

Why Shareholder Yield Beats Dividend Yield

"It's the number one performing fund in its category since inception," Meb says of SYLD. "One of the best things all our friends in the ETF world are good at is copying what's been working. I mean, how many AI funds have we seen in the past year? The world is yet to embrace shareholder yield."

The concept is straightforward: instead of screening only for dividends, include net share buybacks as part of the total cash returned to shareholders. Buybacks overtook dividends in any given year starting in the late 1990s, yet the vast majority of income strategies still ignore them entirely. "That's insane," Meb says bluntly.

He explains the mechanics with characteristic directness: "Buybacks, at their definitional core , this is freshman-level finance 101 , if a stock is trading at intrinsic value, a buyback is the exact same thing as paying out a cash dividend. Full stop." The advantages over dividends are flexibility (companies can stop buybacks without the signaling disaster of cutting a dividend) and tax efficiency (investors in high-tax states like California don't owe tax until they sell).

The barrier to adoption is narrative inertia: "Once you have a built-in narrative and you have hundreds of dividend funds, it's hard to shift and say, just kidding, we need to start incorporating buybacks. Because it requires a shift in narrative. And then people say, well, why didn't you do this 10, 20 years ago?" Meb expects the dam to break eventually: "I'm sure Vanguard or BlackRock or State Street will launch a shareholder yield ETF in the next year."

The Content Engine

Meb draws a direct line from content to asset growth, citing Ken Fisher's $13 billion valuation and Ric Edelman's $100 billion radio-built advisory business as predecessors. "People have been doing this for a long time. Going back 50 to 100 years , Charles Dow started the Wall Street Journal, Graham was writing a long time ago." The modern era evolved from academic papers to books to blogs to podcasts to YouTube , "and I'm told TikTok and who knows what's next."

His distribution reach is significant: a free email service going to what he says is over 900,000 investors through IdeaFarm.com, plus the Meb Faber Show podcast and consistent social media presence. "Not too many Mebs in the world. So if you Google Meb Faber, you'll find me." The nameplate advantage is real.

Trend Following: The Unloved Diversifier

Beyond shareholder yield, Meb is a vocal advocate for trend following as a portfolio diversifier. "In 2022, the only thing that helped protect portfolios was being short bonds. Everyone owns bonds. Everyone owns U.S. stocks. And when both did poorly, there was nowhere to hide." He points to current trend-following performance: "Go to trend followers this year , they've got a big position in cocoa, things like that." The regime-agnosticism of trend following makes it genuinely non-correlated to traditional stock/bond portfolios.

Building Products They Actually Want to Own

Cambria's product development philosophy is refreshingly self-interested: they build funds they want to own. When they couldn't find a good inverse fund that wasn't too complicated or too expensive, they built one. When they wanted a global REIT ETF with high-quality value exposure instead of market-cap weighting, it didn't exist , "I don't want just a U.S. REIT. I don't want a foreign one. I certainly don't want market-cap weighted, because these funds don't yield anything. When they get killed 50%, 70%, I want high-quality value exposure and I want it to be global." So they built it.

The rules-based approach means less of the "discretionary, emotional, psychological trauma" that Meb sees among his discretionary friends. "One of the nice things about being a rules-based investor is you don't have a lot of that." It's a genuinely pleasant way to manage money , following the system rather than agonizing over every macro data point.

Shareholder yield may still be orphaned by the broader industry, but 11 years of number-one category performance and $2.5 billion in assets suggest Meb doesn't need the imitators to validate the thesis. Eventually they'll show up , and when they do, Cambria will have the track record, the brand, and the head start. The Warren Buffett connection makes the point irrefutable: "He's been writing about buybacks in annual letters all the way back to the 1980s , there's no better use of cash if a company's stock is trading far below intrinsic value than buying back shares." If the world's most famous investor has been advocating shareholder yield for 40 years, the question isn't whether the concept works , it's why the ETF industry has been so slow to embrace it.

Key Takeaways

• that he can "still show up in the office in surf gear and flip flops." With about $2.5 billion in assets and 15 funds, Cambria is a quantitative, rules-based shop run by a former engineer with a biotech background.
• And his flagship shareholder yield strategy remains one of the most interesting orphans in the ETF space , a consistent outperformer that the industry has inexplicably refused to copy.
• "It's the number one performing fund in its category since inception," Meb says of SYLD.
• "One of the best things all our friends in the ETF world are good at is copying what's been working.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.