Capital Group has launched a trio of new actively managed fixed income ETFs.

Holly Framsted, Director of ETFs at Capital Group.

Listed on NYSE Arca, the fully transparent funds provide short-duration, intermediate municipal, and multisector bond exposures.

They are the Capital Group Short Duration Income ETF (CGSD US), Capital Group Municipal Income ETF (CGMU US), and Capital Group US Multi-Sector Income ETF (CGMS US).

According to Capital Group, the funds benefit from the firm’s history of low fees, fundamental research process, long-term investment approach, and multimanager investment system.

Capital Group made its ETF debut in February by listing five equity ETFs and one fixed income ETF. As of the end of September, the suite had surpassed $3 billion in assets under management.

Mike Gitlin, Head of Fixed Income for Capital Group, said: “Now is a good time for financial professionals and investors alike to consider active fixed income ETFs. We’ve deliberately built our three new active ETFs in categories that have historically been underserved by active ETF managers. We believe these will help investors manage short-term cash needs, generate tax-exempt income, and benefit from some of the best starting yields we’ve seen in credit in years.”

Holly Framsted, Director of ETFs for Capital Group, added: “Our low-cost, actively managed ETFs are designed to sit at the core of an investor’s portfolio. Since our launch last February, we’ve been among the fastest growing suite of active ETFs in the market, validating both our approach, informed by listening to the financial professionals and investors we serve and timing.”

The ETFs

The Capital Group Short Duration Income ETF pursues a higher income profile than enhanced cash investments with structurally less interest rate exposure than intermediate bond funds. The fund invests primarily in investment-grade, US dollar-denominated government, corporate, and securitized bonds while maintaining an average portfolio duration below two years. Up to 5% of the portfolio’s assets may be allocated to securities rated BB+ or below.

The ETF comes with an expense ratio of 0.25%.

The Capital Group Municipal Income ETF is designed to serve as a core municipal allocation that pursues tax-exempt income consistent with capital preservation. Up to 65% of the portfolio’s assets may be allocated to securities with sub-investment-grade credit ratings. The fund has a flexible approach to managing duration and yield curve exposure, although, in most market environments, it is expected to be within one year of the duration of its broad maturity benchmark.

The ETF comes with an expense ratio of 0.27%.

The Capital Group US Multi-Sector Income ETF pursues a high level of current income alongside the opportunity for capital appreciation. The fund invests in a broad range of debt securities from issuers domiciled in the US including US Treasuries, investment-grade and high-yield corporate bonds, municipal bonds, and securitized debt. Designed as a relative value credit fund, the ETF seeks to generate high income across market cycles while pursuing lower downside risk and volatility compared to traditional single-sector high-income funds.

The ETF comes with an expense ratio of 0.39%.