David Claude Pursell
Senior Portfolio Manager
Cambria Investment Management
Tell us why you’re here today.
We’re here today to ring the Closing Bell to celebrate the listing of our fund, Cambria Core Equity, CCOR, on the New York Stock Exchange.
Tell us about Cambria’s ETF business.
Cambria’s ETF business is growing pretty rapidly. Currently we have 10 ETFs listed with over $600 million in AUM, and our firm-wide assets are approaching $1 billion.
Describe the strategy behind the CCOR Fund.
The idea behind Cambria Core Equity (CCOR) is to develop an investment strategy that gives investors access to Large Cap U.S. Equities while protecting the downside with a dynamic hedging technique; thus the name Core Equity. We believe that we can design portfolios that can give our clients sufficient upside in the markets and still protect us on the way down. So the idea is to hedge and protect, while continuing to grow.
What market exposure does your ETF provide?
This fund primarily holds dividend-paying large-cap stocks. CCOR focuses on high-quality U.S. equities that offer current dividends. Positions are selected based on a company’s ability to grow earnings and a willingness to increase dividends over time.
What other factors may influence your ETF construction process?
The portfolio is invested in an equally weighted basket of 50 equities, from there we use listed options to hedge the portfolio. The hedging strategy is dynamic and will change with market conditions. The overall volatility of the market will have the greatest influence on the portfolio. As volatility increases, the options become a much larger driver of returns and create unique opportunities.
Where do you see opportunities in the market for Active ETFs?
I believe the active ETF market is just beginning. Over the past few years, the mutual fund market has seen continuous money flows out as ETFs have exploded in popularity. Strong market conditions and passive ETFs have helped with this, but as markets become more volatile over time, I think the use of active management will become popular again. Active ETFs will become the vehicle of choice.
For us, the New York Stock Exchange is all about tradition and exposure, and that's what brought us here. We are a growing firm that strives to deliver for our clients, and luckily the NYSE meets all of those expectations.
Hedge and protect, while continuing to grow