4 min readBy Ron Koren ETF Insider
How does the GAA ETF work?
The GAA ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The Cambria Global Asset Allocation ETF (GAA) is managed by Cambria Investment Management, L.P., and it is designed to deliver absolute positive returns while reducing downside volatility and managing risk. GAA achieves this by constructing a diversified portfolio of exchange-traded vehicles (ETFs and ETPs) that provide exposure to various asset classes, including equities, fixed income, real estate, commodities, and currencies across different regions and sectors globally. Cambria's quantitative approach involves selecting underlyings that seek exposure to undervalued markets based on valuation metrics like the cyclically adjusted price-to-earnings ratio (CAPE Shiller P/E), as well as employing momentum and trend-following strategies to identify assets with positive price trends.
The Cambria Global Asset Allocation ETF (GAA) is primarily focused on delivering absolute positive returns with reduced downside volatility and manageable risk. While its primary objective isn't centered on dividends, the ETF's performance is influenced by the underlying assets it invests in, which include various asset classes such as equity and fixed income securities, real estate, commodities, and currencies. GAA typically allocates around 45% to equity securities, 45% to fixed income securities, and 10% to other asset classes. Any dividends received by the ETF are a result of the performance of the underlying assets and their dividend policies, making it suitable for investors seeking a balanced approach to capital appreciation and potential dividend income.
Tracking the Global Asset Allocation ETF (GAA) involves identifying an investable portfolio of exchange-traded vehicles that provide diversified exposure to major asset classes across different regions, countries, and sectors worldwide. GAA aims to achieve positive returns with reduced downside volatility and risk management by allocating at least 80% of its assets to affiliated and unaffiliated exchange-traded funds (ETFs) and other exchange-traded products (ETPs). This diversified approach encompasses various investment asset classes, including equities, fixed income securities, real estate, commodities, and currencies, while employing factors such as value, momentum, and trend investing to navigate undervalued markets and avoid overvalued ones. GAA also allocates a significant portion of its assets to long positions in foreign equities or debt securities and may utilize instruments like futures, options, and swap contracts, providing investors with a comprehensive global investment strategy. Cambria Investment Management, L.P., actively manages GAA's portfolio to align with its investment objective and target allocations, making it an attractive choice for those seeking a diversified approach to global asset allocation.
The correlation aspect of the Cambria Global Asset Allocation ETF (GAA) is essential in understanding its performance in relation to various asset classes around the globe. GAA is designed to provide positive returns with reduced downside volatility by investing in a diversified portfolio of affiliated and unaffiliated exchange-traded funds (ETFs) and other exchange-traded products (ETPs). Its correlation with these underlying assets is crucial for investors seeking to manage risk, achieve diversification, and optimize their investment portfolios.
The Cambria Global Asset Allocation ETF (GAA) aims to provide investors with absolute positive returns while managing risk and minimizing drawdowns. This fund achieves its objective by constructing a diversified portfolio of exchange-traded vehicles that offer exposure to various asset classes, regions, countries, and sectors worldwide. GAA's portfolio typically includes equity securities, fixed income securities, and other asset classes like commodities and currencies. The fund employs a systematic quantitative approach, including value, momentum, and trend-following strategies, to select its holdings and manage its allocation. This strategy allows GAA to adapt to changing market conditions and seek undervalued opportunities while avoiding overvalued markets. The fund may also utilize instruments such as futures, options, swap contracts, and cash equivalents to enhance its returns and meet its investment objectives.
The exposure characteristic of the Cambria Global Asset Allocation ETF (GAA) is designed to provide investors with a diversified portfolio across various asset classes, regions, and sectors around the globe. This ETF aims to achieve positive returns with reduced downside volatility by investing in a mix of affiliated and unaffiliated exchange-traded funds (ETFs) and other exchange-traded products (ETPs). GAA offers exposure to equity and fixed income securities, real estate, commodities, currencies, and factors such as value, momentum, and trend investing. Under normal market conditions, approximately 45% of the fund''s assets are allocated to equity securities, 45% to fixed income securities, and 10% to other asset classes, providing a well-rounded global investment approach.
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