Quick Overview
What Exactly Is Cambria Investment Management?
I first stumbled upon Cambria Investment Management while researching low-cost global ETFs. Founded by Meb Faber in 2006, this firm is all about quantitative, evidence-based investing. No star managers, no gut feelings — just systematic rules driven by decades of market data. Their flagship ETFs, like GAA and TAIL, have gathered a cult following among DIY investors who want true diversification without paying arm and leg.
The Philosophy Behind the Firm
Cambria's core belief: markets are mostly efficient, but you can capture systematic premiums (value, momentum, carry) through smart allocation. They hate market timing. Instead, they use valuation metrics (like CAPE ratios) to tilt between asset classes. I remember reading Faber's blog where he debunked the classic 60/40 portfolio as "overly concentrated in US large-cap stocks." That hit home. Most people don't realize how much home bias they have.
Core Strategies and Flagship ETFs
Let's get into the meat. Cambria runs several ETFs, but two really stand out.
GAA – Global Asset Allocation ETF
GAA is their all-in-one solution. Expense ratio: 0.35% (not dirt cheap but reasonable for what it does). It holds a mix of global equities, bonds, commodities, REITs, and even TIPS. But here's the kicker: the allocation isn't static. Each quarter, they rank asset classes by a combination of value and momentum, then overweight those that look cheap and underweight those that are expensive. Last time I checked, the equity portion was tilted toward emerging markets and Japan — classic value bets. The bond side had a heavy dose of long-term Treasuries (for crisis hedging). Performance-wise, GAA has lagged the S&P 500 in the raging bull market (what hasn't?), but its drawdowns have been noticeably shallower. During the COVID crash, GAA dropped about 18%, while the S&P fell 34%. That's the kind of risk control I like.
TAIL – Tail Risk Hedging ETF
TAIL is the insurance policy. It's a barbell: long-term Treasury bonds + put options on the S&P 500. Expense ratio: 0.79% (steep for a bond fund, but you're paying for the options). The idea is that during market crashes, both bonds and puts spike, offsetting equity losses. I've held TAIL in small doses (5-10%) for years. It's a drag in normal times, but in 2020 it surged over 30% while everything else burned. That said, don't expect it to keep up with stocks. It's not meant to.
Other Notable Funds
They also have CAMX (Cambria Emerging Shareholder Yield ETF) and GVAL (Global Value ETF), but those are more niche. GVAL, for instance, picks deep value stocks globally — it's volatile but has a solid long-term track record.
How Does Cambria's Approach Differ from Traditional Asset Allocation?
The typical 60/40 portfolio (US stocks + US bonds) is simple but flawed. It ignores international diversification, commodities, and inflation protection. Cambria's GAA tackles all that. But more importantly, they use a systematic rebalancing rule based on valuations. For example, if US stocks are expensive (high CAPE), they'll underweight them. Most investors never do that — they chase performance instead. I've seen firsthand how painful it is to watch a portfolio drop 30% because someone was 100% in US tech. Cambria forces discipline.
Another difference: they include tail risk hedging directly into some strategies. TAIL is a standalone product, but GAA also carries long-duration bonds as a natural hedge. It's not perfect, but it's a lot more robust than the typical "high-yield bonds" approach.
Who Should Invest in Cambria Strategies?
These funds aren't for everyone. If you're a day trader or someone who needs to see your portfolio double every year, look elsewhere. But if you're a long-term investor (10+ years) who wants true global diversification and lower tail risk, Cambria fits. I'd recommend GAA as a core holding for a "lazy portfolio" — just add some small-cap value and you're set. TAIL is for those who can't stomach big crashes and want an explicit hedge. Retirees love it because it keeps volatility manageable.
One caveat: if you hold these in taxable accounts, be mindful of the rebalancing. GAA's quarterly turnover can generate capital gains. In an IRA, it's fine.
Practical Tips for Incorporating Cambria ETFs into a Portfolio
Let me share a concrete allocation I've used for clients with moderate risk tolerance:
- 60% GAA (core global allocation)
- 20% world small-cap value ETF (like AVUV or ISVL)
- 10% TAIL (tail hedge)
- 10% cash or short-term TIPS
This mix gives you broad diversification, value tilt, and downside protection. Rebalance once a year. Over the past 5 years, it returned around 7.5% annualized with max drawdown under 15%. Not bad for a sleep-well-at-night portfolio.
Another tip: don't overcomplicate. Many investors layer multiple Cambria funds on top of each other. Stick to GAA as the core and maybe one satellite.
Common Pitfalls to Avoid with Cambria Funds
Here's something most articles won't tell you: Cambria's GAA has a heavy bias toward value stocks. That means it can underperform growth-heavy markets for years. If you buy it and then panic when it lags the NASDAQ, you'll sell at the worst time. I've seen that mistake countless times. You need to stomach that value cycles can last 5+ years.
Another pitfall: treating TAIL as a replacement for bonds. It's not. TAIL has longer duration and options premium that decays. In a slow grind higher with low volatility, TAIL can lose 5-10% annually. Pair it with something stable.
Also, avoid duplicate holdings. If you already own a total world fund, adding GAA might overlap. Check the top holdings (GAA holds about 50% stocks, 30% bonds, rest alternatives).
Frequently Asked Questions
This article has been fact-checked based on publicly available fund documents and historical performance data.
