In short: The one name Ferg is adopting — as both the passive allocation and the benchmark he will be measured against. The section that names it opens by ruling out the obvious alternative: "this doesn't mean I want to take the other side of market cap weighting; I want to go long in a smarter, passive way. My favourite approach is Meb Faber's shareholder yield." The endorsement is unusually committal for a curation email — "as I went over in my recent piece, I see little opportunity cost and a fat margin of safety in shareholder yield, as it has outperformed and is what I plan to benchmark my portfolio against moving forward." The valuation gap is offered as the reason it should keep working: "what's even more impressive is that EYLD sits on a forward PE of 9x, while SPY is 20x and QQQ is 22.5x." Read against the Kedrosky passage earlier in the same post — where a high multiple makes failure "overdetermined" — a 9x forward multiple is the position at the opposite end of that distribution: few ways to disappoint, and the disappointment already priced. The forecast is explicit: "my view is that the above performance gap will continue to widen for years to come." (Note the pairing: EYLD is Cambria's emerging-markets shareholder-yield fund, and it appears in the same paragraph as the EEM critique — the same asset class, weighted by cash returned to shareholders rather than by market capitalization.)
Almost every index fund you can buy weights its holdings by size: the bigger a company's stock-market value, the more of your money goes into it. That is what "market-cap weighting" means, and Ferg is upfront that it works — it is "incredibly efficient and is hard to beat." His worry is about why it works. He compares it to just-in-time supply chains, which were also unbeatable on cost right up until a shock arrived and everyone rediscovered the value of holding spare stock. His line: "can't beat them until something breaks; then resilience/redundancy is everything."
EYLD is his preferred alternative — Cambria's emerging-markets fund built on shareholder yield, an approach popularised by Meb Faber. Instead of asking "how big is this company?", shareholder yield asks "how much cash is this company actually handing back to its owners?" — dividends paid, shares bought back, and debt paid down, added together. The appeal is that all three are cash out the door: a company can massage reported profits, but it cannot fake money it has already sent to shareholders. Weighting by that measure naturally tilts you toward businesses that generate real cash and away from the ones whose weight comes from a soaring share price.
Ferg's endorsement goes further than "I like this." He writes that shareholder yield "has outperformed and is what I plan to benchmark my portfolio against moving forward" — he is making it the yardstick his own stock-picking has to beat. That is a meaningful commitment, because it means every discretionary position he takes now has to justify itself against a cheap, mechanical alternative he could own instead.
The clincher he offers is price. "EYLD sits on a forward PE of 9x, while SPY is 20x and QQQ is 22.5x" — a price-to-earnings ratio is roughly how many years of expected profit you are paying up front, so he is buying about nine years' worth where the US market costs twenty and the tech-heavy Nasdaq index costs twenty-two and a half. Set that against the Kedrosky passage he quotes earlier in the same email — that the higher the multiple, the more ways there are to disappoint, until failure becomes the likely outcome — and the two halves of the post fit together: the expensive side of that gap has many ways to go wrong, the cheap side has few. His forecast is that "the performance gap will continue to widen for years to come."
In short: The emerging-markets leg, which "just hit 10 year" alongside the other two and shares the top-decile record. Named as the direct substitution for a generic EM equity allocation: "I take out my US equities, I put in SYLD or EYLD for emerging equities — those are very simple substitutions."
The emerging-markets member of the same three-fund family, and the one that most recently crossed its ten-year anniversary — also top decile over that decade. It applies the identical net-cash-return screen to companies in developing countries, agnostic to size, sector and country, with caps to stop any one country or sector dominating.
In his core/satellite framing, this is a building block rather than a bet: if you already hold a generic emerging-markets index fund, he suggests swapping it out for EYLD and getting a portfolio tilted toward companies that actually hand cash back, rather than one tilted toward whichever emerging company is largest.
27:32So, SYLD, FYLD Got my FYLD hat right here. FYLD which just hit a 10-year track FYLD has hit it EYLD's 10-year track. All three of those funds we just sent out an email, y'all probably got it. We're top decile over the past 10 years. Awesome, super cool, we're really proud of that. Some of them it's like top 5% versus their category.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.