Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Value investing has generated disappointing returns for a considerable time. Eugene Fama and Kenneth French published their landmark paper describing the value factor in 1992. Since then, the S&P 500's intangible assets (brands, intellectual property) have increased significantly. Utilizing free cash flow in lieu of traditional value metrics may result in superior performance.
For shareholder yield, the current practical ETF option is SYLD, the first one in the space and was able to grab the representative ticker. It has oscillated between Mid and small cap value overtime. I have looked at it a few times and passed on it.
Cambria has rolled out LYLD and MYLD to capture large and micro caps. WTV and SHRY also track shareholder yield in their own way. It is interesting to compare them to each other with https://www.etfrc.com/funds/overlap.php
A wrinkle on the cash flow idea are the Invesco revenue etfs RWJ, RWK, and RWL that track the S&P 600, 400, and 500. They weight by revenue. IIRC, their thesis is that all sorts of games can be played with numbers after revenue is reported. Out of the Mag 7, only Amazon and Apple crack the top ten of the RWL fund tracking the 500.
I own RWJ and SYLD in my taxable. I used to hold them in the IRA until I began the simplification process.
Distillate Capital also runs at least three ETFs using a cash-flow model. COWZ had wonderful performance in 2020, 2021, and 2022, and has attracted a whopping $25B in AUM. I was a fan of DSTL, DSMC, SYLD and COWZ until 2023 when fortunes turned notably south and have not reversed. During the COVID drawdown, MFO members batted about these funds when many were in search of something that might stem the downward trend of the markets.
There are definitely different ways to play shareholder yield. Cambria's funds put their thumbs on the value factor. Wisdom Tree's WTV puts its thumb on the quality factor. WTV has only been using the shareholder yield factor since 2017, as near as I can tell.
I am definitely keeping an eye on WTV for my taxable account.
I bought SYLD and RWJ in 2023, and they have done well enough since then (12.5% and 14.5% if M* can be believed) that I don't regret their purchase the way I have regretted some others. I doubt I'll be adding to those positions. They were certainly too bumpy for my IRA.
Comments
There are also several shareholder yield* ETFs - SHRY, LYLD (LC), MYLD (SC).
*Dividend yield + buyback yield (need cash flow for both)
For shareholder yield, the current practical ETF option is SYLD, the first one in the space and was able to grab the representative ticker. It has oscillated between Mid and small cap value overtime. I have looked at it a few times and passed on it.
OFVIX is another fund tracking shareholder yield. The M* blurb doesn't tell you much, so go here for more info on their thinking about shareholder yield: https://osam.com/Commentary/shareholder-yield-a-differentiated-approach-to-an-efficient-market
A wrinkle on the cash flow idea are the Invesco revenue etfs RWJ, RWK, and RWL that track the S&P 600, 400, and 500. They weight by revenue. IIRC, their thesis is that all sorts of games can be played with numbers after revenue is reported. Out of the Mag 7, only Amazon and Apple crack the top ten of the RWL fund tracking the 500.
I own RWJ and SYLD in my taxable. I used to hold them in the IRA until I began the simplification process.
I am definitely keeping an eye on WTV for my taxable account.
I bought SYLD and RWJ in 2023, and they have done well enough since then (12.5% and 14.5% if M* can be believed) that I don't regret their purchase the way I have regretted some others. I doubt I'll be adding to those positions. They were certainly too bumpy for my IRA.