Cambria Fund Profile – Cambria Global Value ETF (GVAL)

Episode Summary

Executive Summary: The episode argues that recent U.S. mega-cap dominance has increased concentration and valuation risk, making global diversification and value exposure more important. It spotlights Cambria Global Value ETF (GVAL) as a rules-based strategy that seeks the cheapest country markets and undervalued stocks globally, with 2025 performance illustrating how neglected markets can rebound sharply when leadership rotates.

Main Topics: Why diversification matters in a concentrated U.S. market: The host warns that heavy exposure to a small group of expensive U.S. mega-caps can create concentration, valuation, and regime-shift risk even if recent returns have been strong. GVAL’s investment thesis: global value in out-of-favor markets: GVAL is presented as a strategy designed to invest where valuations are low and sentiment is weak, aiming to capture potential mean reversion and leadership rotation. Fund construction and methodology: The ETF starts with roughly 45 developed and emerging markets, ranks them using long-term valuation composites, and then selects undervalued stocks within the cheapest countries. Comparing GVAL to cap-weighted global benchmarks: The host contrasts GVAL with MSCI ACWI, emphasizing that cap-weighted indexes are backward-looking and increasingly concentrated in U.S. mega-caps. Portfolio use cases for investors: GVAL is framed as a core international sleeve, a diversifier for U.S.-centric portfolios, a tactical value allocation, or a complement to growth-oriented holdings. Performance and risk caveats: Strong recent returns are highlighted, but the speaker repeatedly notes that past performance does not guarantee future results and that international, emerging-market, and active-management risks remain.

Key Arguments: U.S. market leadership has been unusually concentrated, creating hidden risks in valuation and concentration that many investors overlook until regimes change. Diversification should not be viewed as merely defensive; it can be an offensive strategy because the next major opportunity may arise in an unexpected market. Global value investing seeks exposure to countries and stocks trading at depressed valuations, where sentiment can reverse quickly and produce outsized gains. Cap-weighted indexes naturally chase past winners, which can leave investors crowded into expensive names and reduce diversification benefits. GVAL’s methodology attempts to identify the cheapest countries first and then select the most undervalued stocks within those markets, creating a systematic value tilt. Recent strong performance from GVAL in 2025 is used as evidence that neglected markets can rebound sharply when market leadership rotates. For investors already holding growth-heavy or U.S.-heavy portfolios, GVAL can serve as a counterbalance and broaden exposure across countries and sectors.

Data Points: GVAL 2025 return: roughly 55% NAV return - The host says GVAL had a very strong year in 2025 and led U.S. diversified active ETFs. GVAL 2026 YTD commentary: described as shaping up to be a strong year - The speaker notes 2026 has also been strong, though no precise figure is given in the narrative. Top 10 S&P 500 weight: 39.3% - As of May 2026, the 10 largest S&P 500 constituents represented 39.3% of index weight. Top 10 S&P 500 stock performance vs rest of index, 1957-2023: -2.4% per year - GMO data cited to show the 10 largest stocks underperformed an equal-weighted basket of the remaining 490 stocks over the long run. Top 10 S&P 500 stock performance vs rest of index, last decade: +4.9% per year - The last decade is cited as a marked exception in which the largest 10 stocks outperformed sharply. MSCI ACWI constituents: 2,513 total constituents - Used to illustrate that even broad global indexes can still have concentrated top holdings. MSCI ACWI top 10 weight: 25.1% - As of May 2026, the top 10 holdings comprised 25.1% of MSCI ACWI. MSCI ACWI top 10 holdings from the U.S.: 9 of 10 - The host notes nine of the 10 largest MSCI ACWI holdings are U.S. companies. GVAL country exposure examples: Austria, Poland, Colombia - Examples of the fund’s country tilts as of Q1 2026. GVAL vs ACWI valuation: PE in the low teens vs low 20s - The speaker contrasts GVAL’s lower valuation multiples with MSCI ACWI. GVAL 1-year return through June 30, 2026: NAV 36.69%; market price 35.89% - Required performance disclosure. MSCI ACWI 1-year return through June 30, 2026: 23.67% - Benchmark comparison for the one-year period. GVAL 3-year return through June 30, 2026: NAV 26.09%; market price 26.28% - Required performance disclosure. MSCI ACWI 3-year return through June 30, 2026: 19.70% - Benchmark comparison for the three-year period. GVAL 5-year return through June 30, 2026: NAV 14.41%; market price 14.45% - Required performance disclosure. MSCI ACWI 5-year return through June 30, 2026: 10.98% - Benchmark comparison for the five-year period. GVAL 10-year return through June 30, 2026: NAV 11.20%; market price 11.05% - Required performance disclosure. MSCI ACWI 10-year return through June 30, 2026: 12.78% - Benchmark comparison for the ten-year period. GVAL since inception return: NAV 6.63%; market price 6.65% - Since inception on March 12, 2014. MSCI ACWI since inception comparison: 10.49% - Benchmark comparison since GVAL inception.

Pivotal Quotes: "I view the diversification not only as a survival strategy, but as an aggressive strategy because the next windfall might come from a surprising place." — Peter Bernstein (quoted by host): Used to frame diversification as an opportunity-seeking approach, not just risk reduction. "The point isn't to celebrate a number, but rather to understand what it signals about neglected parts of the market." — Meb Faber: Explaining that GVAL’s strong returns matter mainly as evidence of rotation and re-pricing in overlooked markets. "Go where valuations are low, even if it's non-consensus." — Meb Faber: Summarizes the core philosophy behind GVAL’s country and stock selection process.

Implications: Listeners should consider whether their portfolios are overly concentrated in expensive U.S. mega-caps. GVAL offers a systematic way to add cheaper international exposure, though it remains cyclical, active, and riskier than broad indexes.