A Defensive Stance: Inside the Cambria VAMO ETF's Hedged Approach

Cambria VAMO ETF's Q1 strategy focuses on undervalued US stocks with momentum, heavily weighted in financials & industrials, and employs a major 43% S&P 500 futures hedge for defense.

The Cambria Value and Momentum ETF (VAMO) has outlined its tactical positioning for the current quarter. This actively managed fund employs a quantitative model designed to identify undervalued equities exhibiting positive momentum. In a climate where U.S. markets have recently seen modest declines, the fund's strategy incorporates a significant defensive component to navigate ongoing volatility.

Portfolio Composition and Sector Emphasis

A monthly rebalancing regimen guides the ETF's holdings, which typically consist of between 100 and 106 U.S. stocks. The current sector allocation reveals a distinct focus. Financial services represent the largest portfolio segment at 23.18%, followed by consumer cyclical stocks (18.74%) and industrial companies (14.63%). The fund also maintains notable exposures to the energy (10.89%) and healthcare (9.95%) sectors. By contrast, technology plays a more minor role with a 6.19% weighting, while utilities are largely avoided at just under 1%.

Among individual equity holdings within the top ten positions are Century Aluminum (1.43%), automotive supplier Dana (1.31%), and Liberty Energy (1.22%). Planet Labs (1.21%) and BorgWarner (1.17%) also feature prominently. Collectively, the top ten holdings account for 58.01% of the fund's total assets.

The Core Hedging Mechanism

What sets this ETF apart is its ability to implement a full portfolio hedge using S&P 500 Index futures. This tactical defense is a central feature, with positions adjusted weekly according to systematic rules to respond to potential market downturns. The scale of this hedge is substantial: E-mini S&P 500 Futures for March 2026 alone constitute a 43.10% weighting within the portfolio, underscoring management's current cautious outlook on the broader market.

The fund closed trading last Friday at $35.83, marking a single-day decline of 0.42%. With a total expense ratio of 0.65%, it is priced below the average for comparable strategies in the hedged equity category. The overarching objective of combining value selection with dynamic hedging is to pursue capital appreciation while aiming to reduce overall portfolio volatility.