Meb Faber & Wes Gray - Unlocking Tax Efficiency: Inside the Launch of Cambria's Groundbreaking ETF

Oct 25, 2024

Wes Gray, founder and CEO of Alpha Architect, is a strategic mind pioneering innovative ETF strategies. In this discussion, he dives into the transformative Cambria Tax Aware ETF, emphasizing its potential for tax-efficient capital appreciation with minimal dividends. He breaks down the nuances of the Section 351 tax code, helping investors optimize low-basis investments into ETFs. The conversation also highlights the growing importance of tax-efficient investing in today's landscape and how ETFs are reshaping the investment industry for the better.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

ANECDOTE

BOX ETF Growth

Wes Gray's BOX ETF has grown significantly, exceeding expectations.
In just six to eight months, it grew from $1 billion to over $4 billion in assets under management.

INSIGHT

Tax Efficiency is Key

The biggest cost for investors is taxes, often overlooked compared to expense ratios.
Focus on tax efficiency to maximize returns, as taxes can significantly impact overall performance.

INSIGHT

Section 351 Explained

Section 351 allows transferring assets into a C-corp without immediate tax implications.
It facilitates the movement of low-basis securities into an ETF structure tax-efficiently.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Today's guest is Wes Gray, CEO & Co-CIO of Alpha Architect and a strategic advisor to ETF Architect.

Wes & I discuss the Cambria Tax Aware ETF (TAX), which aims to achieve a tax-efficient investment return consisting of capital appreciation while emphasizing low dividend distributions. We also break down the 351 to ETF contribution process and how investors can transition their low-basis investments into the ETF structure tax-efficiently.

(0:40) Welcome to Wes Gray

(6:20) Section 351

(20:15) Tax aware investing

(27:49) The impact of dividends on tax efficiency

Resources:

Show Notes: https://www.themebfabershow.com/episodes/X7iN68AkO9u

The Cambria Tax Aware ETF (TAX) https://cambriafunds.com/tax

Introduction to the 351 ETF Exchange https://www.cambriainvestments.com/wp-content/uploads/2024/10/2024-Introduction-to-the-351-ETF-Exchange-Cambria.pdf

Are you interested in learning more? https://www.cambriainvestments.com/tax/

Wes Gray and Bob Elwood’s episode in February 2024 https://www.themebfabershow.com/episodes/p3V43ySa2El

To determine if this Fund is an appropriate investment for you, carefully consider the Fund's investment objectives, risk factors, charges and expense before investing. This and other information can be found in the Fund's full or summary prospectus which may be obtained by calling 855-383-4636 (ETF INFO) or visiting our website at www.cambriafunds.com. Read the prospectus carefully before investing or sending money.

The Cambria ETFs are distributed by ALPS Distributors Inc., 1290 Broadway, Suite 1000, Denver, CO 80203, which is not affiliated with Cambria Investment Management, LP, the Investment Adviser for the Fund.

Investing involves risk, including potential loss of capital.

Cambria does not provide tax advice, please consult your tax professional for tax advice.

TAX: There is no guarantee that a Fund will achieve its investment goal. Investing involves risk, including the possible loss of principal. The Fund will invest in stocks that have lower dividend distributions, which are generally taxed as ordinary income. The Fund’s tax aware strategy may reduce an investor’s taxable income from the Fund but will not eliminate it. Even though a tax aware strategy is being used, it may not reduce the amount of taxable income and capital gains distributed by the Fund to shareholders, or the amount of Fund distributions that are taxable at ordinary income rates. Narrowly focused funds typically exhibit higher volatility. Diversification may not protect against market losses.

TAX is actively managed.

Learn more about your ad choices. Visit megaphone.fm/adchoices