Special Report: Active Management is a Better Game for ETFs

0

Capital Group recently decided to offer active ETFs and in doing so is committed to providing what it considers to be the best experience for investors. The firm brings over 90 years of active management to the ETF space. The six active and transparent ETFs offer more choice for investors as well as the full support of Capital Group’s vast resources.

Designed to help strengthen the core of investors’ portfolios, the new ETFs aim to provide solutions for some of the most common portfolio allocations. Although different from US funds, many Capital Groups ETFs are based on seasoned strategies, and all leverage The Capital System℠, the firm’s distinct investment approach.

The company has opted for a transparent structure because it allows the broadest investment universe to express its most convinced ideas and gives investors the most visibility.

The new ETFs can be used together or to complement other investment vehicles, such as mutual funds or passive ETFs. A potential benefit of having active ETFs at their core is that they can help investors seek consistency in a variety of market environments, as active managers may be in a better position to alter portfolio holdings in response to downturns. of the market. The result could be a stronger core portfolio and perhaps a smoother ride for investors as they pursue their long-term goals.

Here are the funds in Capital Group’s first range of ETFs:

CGUS: Capital Group Core Equity ETF3

Combines growth and revenue to potentially deliver a smooth ride

How it fits: Core U.S. Equity Allocation

  • Focused on US equities: A portfolio that can serve as a complement to an S&P 500 index fund. Like all Capital Group funds, it uses The Capital System, which is designed to help portfolios participate in strong market environments and mitigate volatility in harsh environments.
  • Focus on the fundamentals: Rigorous company selection, informed by fundamental research, identifies companies with attractive prospects for long-term growth and/or dividends.
  • Balance: Mixture of many blue-chip dividend-paying companies with non-dividend-paying companies that have attractive growth potential.

CGGR: Capital Group Growth ETF3

Seeks growth by investing in a broad group of companies that have the potential for capital appreciation

How it fits: US Growth Allowance

  • Growth: A broad strategy that seeks capital growth as a goal rather than an investment style, meaning that although the fund will primarily invest in larger, faster growing US companies, managers have flexibility at across different geographies and investment approaches seeking capital appreciation.
  • Flexible: The fund takes a company-by-company approach, investing in traditional growth companies as well as cyclical and turnaround situations in its quest for capital appreciation.
  • Consistent: The fund takes a long-term perspective, which allows for a patient approach to growth investing.

CGDV: Capital Group Dividend Value ETF

Refined “Value”

How it fits: U.S. Base Value Growth Breakdown

  • Assess: Dividends can provide a steady stream of returns for investors and this fund values ​​companies that can pay dividends in a variety of markets and economic environments.
  • Revenue: Seeks to produce consistent income that exceeds the average return of the S&P 500 by focusing on companies that pay dividends or have the potential to pay dividends.
  • Quality: The fund invests primarily in well-established US companies with a track record of financial strength and regular dividend payments.

CGXU: Capital Group Focused International Equity ETF3

Investing in the field for international growth

How it fits: Basic international allowance

  • Opportunistic: Explore opportunities outside of the US, including emerging markets, with a company-by-company strategy that seeks long-term capital growth.
  • Companies, not countries: The fund aims to seek returns primarily through company selection, not regional or sector selection.
  • Consistency: A core non-US fund that seeks to invest in promising international companies for long-term capital growth, taking advantage of Capital Group’s distinct approach to investing.

CGGO: FNB Capital Group Global Growth Equity3

Move anywhere to grow

How it fits: Growth Allowance

  • Vast: Adopts a flexible geographical approach in its search for fundamentally sound and high-potential companies anywhere in the world.
  • Business centered: Takes a bottom-up approach, analyzing all aspects of companies with significant growth potential, including where they do business, their position in their industry, their products, and the health of their supply chains.
  • Backed by vast global resources: Leveraging an extensive global research network, the fund invests with the understanding that as global markets and economies become more connected, an informed perspective is increasingly important.

CGCP: Capital Group Core Plus Income ETF3.4

A balanced approach to preserving capital and seeking income while pursuing total return

How it fits:Single-solution core-plus-income bond allocation

  • Heart: Seeking downside protection alongside a resilient income stream.
  • Diversification: A broadly diversified portfolio with multiple sources of active return.
  • Revenue:Seeks a resilient income stream over a full market cycle through sector diversification, including high yield corporates, emerging markets and securitized debt.

Designed to help investors pursue their long-term goals

Capital Group is focused on a long-term, goals-based approach to investing and the belief that the core of investors’ portfolios should align with their goals and promote resilience in times of volatility. New ETFs are goal-oriented funds that seek better investment results and aim to provide the flexibility to pursue attractive investments in a variety of markets.


1Morningstar Direct, as of 12/31/21

2To invest in non-US stocks, semi-transparent and non-transparent ETFs must use American Depository Receipts (ADRs), which may have less liquidity or be subject to greater price fluctuations than the non-US security itself .

3Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.

4 The principal return of bond funds and funds with large underlying holdings of bonds is not guaranteed. The fund’s shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. The use of derivatives involves a variety of risks, which may be different or greater than the risks associated with investing in traditional cash securities, such as stocks and bonds. Higher yielding, higher risk bonds can fluctuate more than higher quality bonds, so investors should maintain a long-term perspective.


Investments are not FDIC insured, nor are they deposited or guaranteed by any bank or other entity, so they may lose value.

Investors should carefully consider the investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and simplified prospectuseswhich can be obtained from a financial professional and should be read carefully before investing.

Capital Group’s exchange-traded funds (ETFs) are actively managed and do not seek to track any specific index. ETFs are bought and sold through an exchange at the then prevailing market price, not net asset value (NAV), and are not individually redeemed by the fund. Shares may trade at a premium or discount to their net asset value when traded on an exchange. Brokerage commissions will reduce returns. There can be no assurance that an active market for ETFs will develop or be sustained, or that the ETF’s listing will continue or remain unchanged.

As non-diversified funds, Capital Group ETFs have the ability to invest a greater percentage of assets in securities of individual issuers than a diversified fund. Therefore, a single issuer could harm a fund’s results more than if the fund invested a smaller percentage of assets in securities of that issuer. See the applicable prospectus for further details.

Each S&P index (“Index”) shown is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2022 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without the written permission of S&P Dow Jones Indices LLC.

All Capital Group trademarks mentioned are the property of The Capital Group Companies, Inc., an affiliate or fund. All other company and product names mentioned are the property of their respective companies.

This article is intended for US residents only.

American Funds Distributors, Inc., Member FINRA.

This content, developed by Capital Group, home of the US funds, should not be relied upon as the primary basis for investment decisions and is not intended to serve as unbiased investment or trust advice.

©2022 Morningstar, Inc. All rights reserved. Except for the Lipper Rating Information, the information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) are not guaranteed to be accurate, complete or timely. Neither Morningstar, its content providers nor Capital Group are responsible for any damages or losses arising from any use of this information. Past performance is not indicative of future results. The information is calculated by Morningstar. Due to different calculation methods, the figures presented here may differ from those calculated by Capital Group.

The Standard & Poor’s 500 Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks.


Source link

Share.

Comments are closed.