A Close Look at Capital Group's 5 New Active ETFs Listed on NYSE ARCA

The Fixed-Income Funds

At a 0.27% expense ratio, CGCB ranks among some of the cheapest actively managed bond ETFs in the market. In comparison, the long-standing and popular PIMCO Active Bond ETF (BOND) charges nearly twice as much at 0.55%. 

With an average duration of 6 years, CGCB stacks up similar to most intermediate duration aggregate bond funds, albeit with a higher yield-to-worse of 6.2%. However, the ETF's unconstrained approach allows it to invest both in non-U.S. bonds, warrants, rights, and derivatives to enhance return and manage risk. So far, it has attracted $34 million in AUM.

Investors looking for a more tax-friendly alternative can opt for CGSM, which holds high-quality municipal bonds selected for low interest rate sensitivity. With an average duration of 2.4 years yet with a competitive yield to worse of 4.3%, this ETF offers a good balance of interest rate risk and return. 

CGSM's objective is to outpace the yield from the average passively managed tax-exempt money market fund. Uniquely, this ETF is able to invest up to 20% of its portfolio in private activity bonds, which are those that fund private, for-profit organizations.

The Equity Funds

On the equity side, CGDG provides a dividend growth strategy at a 0.47% expense ratio. Unlike some dividend growth ETFs that follow the methodology of a benchmark index, this ETF actively selects stocks Capital Group identifies as having both attractive current yield and dividend growth potential. 

With a portfolio of just 76 holdings, this ETF is fairly concentrated. While the active share percentage is unknown at this time, its composition looks to differ significantly from most benchmark indexes. The ETF has a global focus, with around 50% in U.S. equities and the rest in developed markets. 

For investors seeking an international-only focus, Capital Group also offers CGIE, which charges a 0.545% expense ratio. The objective of this fund is to provide exposure to international developed markets, while actively managing holdings to reduce volatility and downside risk.

Accordingly, the ETF will select stocks identified as having traits associated with better resilience to drawdowns, such as better balance sheets and higher dividend payments. CGIE is also fairly concentrated with 69 holdings at present, with 61% hailing from European countries. 

The Asset Allocation Fund

In recent years, numerous ETF managers have launched all-in-one, "asset allocation" ETFs that provide tailored mixtures of stocks and bonds. Popular examples include the iShares Core Moderate Allocation ETF (AOM), which wraps numerous iShares index ETFs, and the Avantis Moderate Allocation ETF (AVMA), which has a factor investing angle. 

Capital Group's entrant here is CGBL, which targets an allocation of anywhere from 50% - 75% in global equities and the rest in fixed-income via other underlying Capital Group ETFs. On the equity side, the ETF is expected to target both growth and dividend stocks. CGBL charges a 0.33% expense ratio. 

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.