Los Angeles-headquartered Capital Group, one of the world’s oldest and largest investment management organizations, has introduced its first ETFs.
Holly Framsted, Director of ETFs at Capital Group.
The $2.6 trillion asset manager made a strong debut by launching six fully transparent, actively managed ETFs which are designed to serve as core portfolio building blocks for alpha-seeking investors.
Listed on NYSE Arca, the suite consists of one multi-sector fixed income ETF, as well as five equity funds targeting stocks from global, US, and global ex-US universes.
Holly Framsted, Director of ETFs at Capital Group, said: “Our suite of six ETFs, which represent the hallmark of our investing, includes three growth strategies offering varying degrees of domestic and international exposure, a core US equity fund, and a US equity fund that emphasizes income. Finally, our fixed income offering is a core plus strategy that pursues income with a level of capital appreciation, leveraging our strong team and capabilities in fixed income.”
According to Framsted, Capital Group’s initial suite of ETFs benefit from the firm’s history of low fees, fundamental research, long-term investment approach, and multimanager investment system.
“When it comes to money, for most people, their main objectives are for financial stability, to support themselves and their family, and to retire with confidence,” added Framsted. “We built these ETFs with everything Capital Group is known for behind them to help people reach their long-term investment goals.”
Tim Armour, Chairman and CEO of Capital Group, said: “The active ETF market is still in its early days. At Capital Group, we introduce new offerings when we believe we can help investors achieve superior results over the long term. I believe active ETFs will be transformative for the industry and that we will be a leader in this market. These six active ETFs will provide another way for investors to access our investment capabilities in the vehicle they want.”
The Funds
The Capital Group Core Plus Income ETF (CGCP US) seeks higher income than traditional core bond funds while maximizing total return by using fundamental analysis to identify opportunities across the credit spectrum. Eligible securities include government and agency debt, corporate bonds, mortgage and asset-backed securities, emerging markets debt, municipal bonds, and high yield bonds. The fund may invest up to 35% of its assets in securities rated below investment grade and a similar percentage in bonds denominated in currencies other than the US dollar. The ETF comes with an expense ratio of 0.34%.
The Capital Group Global Growth Equity ETF (CGGO US) seeks long-term capital appreciation by investing in growth-oriented companies of any size around the world with at least 40% of fund assets being allocated to equities listed outside the US. The strategy takes a bottom-up approach, analyzing aspects such as a company’s business location, industry position, products, and the health of its supply chain. The ETF comes with an expense ratio of 0.47%.
The Capital Group Growth ETF (CGGR US) follows a similar approach but focuses predominantly on larger, faster-growing companies and caps the allocation to stocks listed outside the US at 25%. The ETF comes with an expense ratio of 0.39%.
The Capital Group Core Equity ETF (CGUS US) primarily invests in US-listed stocks of any size, favouring those with both growth potential and defensive characteristics such as sustainable dividend payments. Up to 15% of assets may be invested in securities listed outside the U.S. The fund is designed to serve as an alternative to the S&P 500 with lower volatility in challenging market environments. The ETF comes with an expense ratio of 0.33%.
The Capital Group Dividend Value ETF (CGDV US) aims to produce consistent income exceeding the average yield of the S&P 500 while maintaining the potential for modest capital growth. The fund targets larger, dividend-paying stocks of established companies and may invest up to 10% of its total assets in stocks listed outside of the US. The ETF comes with an expense ratio of 0.33%.
The Capital Group International Focus Equity ETF (CGXU US) aims to explore growth-related opportunities outside of the US including within emerging markets. The strategy adopts a company-by-company-focused approach based on fundamental bottom-up research. The ETF comes with an expense ratio of 0.54%.