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Thursday, March 3, 2022

A $2.7T-AUM Titan Debuts Its First ETFs

Reported by Neil Anderson, Managing Editor

A $2.7-trillion-AUM (as of December 31), privately held, active mutual fund titan has officially entered the ETF business.

Timothy D. "Tim" Armour
Capital Group
Chairman, CEO, Equity PM
Last week, Tim Armour, chairman and CEO of Capital Group [profile], and Holly Framsted, director of ETFs, unveiled the launch of the Los Angeles-based asset manager's first six ETFs. The funds (three domestic equity funds, an international equity fund, a global equity fund, and a fixed income fund) debuted on February 22 on the NYSE Arca, Inc., and they're all actively managed by Capital Research and Management Company.

None of the new funds use Capital Group's famous mutual fund brand, American Funds. Yet they all use the firm's portfolio management system of splitting strategies into multiple segments, each powered by different individual portfolio managers.

"The active ETF market is still in its early days," Armour states. "I believe active ETFs will be transformative for the industry and that wee will be a leader in this market. These six active ETFs will provide another way for investors to access our investment capabilities in the form or vehicle they want — whether that is our mutual funds, SMAs, CITs, or target-date funds — and now, our ETFs."

"Our suite of six ETFs represents the hallmark of our investing," Framsted adds. "We built these ETFs with everything Capital Group is known for behind them — our active management approach, supported by our multi-manager system and deep fundamental research — to help people reach their long-term investment goals."

"We knew it was impreative to design our active ETFs to easily fit into the core of client portfolios and reduce complexity," Framsted adds.

The Capital Group Core Equity ETF comes with an expense ratio of 33 basis points. It is PMed by three Capital Research Global Investors partners (Charles Ellwein, Blair Frank, and Keiko McKibben) and by three Capital International Investors partners (Donald O'Neal, William Robbins, and Carlos Schonfeld).

The Capital Group Core Plus Income ETF (CGCP) comes with an expense ratio of 34 bps. It is PMed by three Capital Fixed Income Investors partners (David Hoag, Damien McCann, and Ritchie Tuazon) and one vice president (Xavier Goss).

The Capital Group Dividend Value ETF (CGDV) comes with an expense ratio of 33 bps. It is PMed by five Capital Research Global Investors partners: Christopher Buchbinder, Martin Jacobs, James Lovelace, James Terrile, and McKibben.

The Capital Group Global Growth Equity ETF (CGGO) comes with an expense ratio of 47 bps. It is PMed by four Capital World Investors partners: Patrice Collette, Paul Flynn, Roz Hongsaranagon, and Jonathan Knowles.

The Capital Group Growth ETF (CGGR) comes with an expense ratio of 39 bps. It is PMed by two Capital International Investors partners (Mark Casey and Irfan Furniturewala) and four Capital World Investors partners (Paul Benjamin, Anne-Marie Peterson, Andraz Razen, and Alan Wilson).

The Capital Group International Focus Equity ETF (CGXU) comes with an expense ratio of 54 bps. It is PMed by four Capital Research Global Investors partners: Nicholas Grace, Sung Lee, Renaud Samyn, and Christopher Thomsen.

The new funds' other service providers include: American Funds Distributors, Inc. as distributor; Dechert LLP as counsel; PricewaterhouseCoopers LLP as independent accounting firm; and State Street Bank and Trust Company as custodian and transfer agent. 

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