ETFs
Capital Group fills gaps in its lineup with new ETFs
By Suzanne McGee
June 27 (Reuters) – Capital Group launched seven new active exchange-traded funds on Thursday, bringing its ETF lineup to 21 products.
Scott Davis, head of ETFs at Los Angeles-based Capital Group, said the new ETFs complement the core strategy suite “so financial advisors can build complete portfolios.”
“We looked at the gaps between what we offer today and what advisors are urgently asking us for as interest in active ETFs accelerates,” Davis said.
According to research group ETFGI, U.S. ETF assets hit a record $9 trillion at the end of May. But Citigroup strategists said this month that while ETF assets under management have climbed 23% since the end of 2021, retail mutual fund assets have fallen 10.1%.
Scott Chronert, a strategist at Citigroup, said that over the next five to 10 years, they “project an additional $6 trillion to $10 trillion in mutual funds to potentially be replaced/cannibalized by ETFs.” .
Capital Group said its 14 existing ETFs, all of which are actively managed products and launched in the past two years, have $29 billion in assets, giving it a 4% share of the active ETF market, which is the fastest-growing part of the ETF universe.
The new funds include four equity funds, including a global equity ETF and a core international equity fund.
The Capital Group New Geography Equity ETF emphasizes companies that derive a large portion of their revenue from emerging markets, rather than those domiciled in emerging markets, which Davis believes will provide less volatile returns.
Meanwhile, the Capital Group Conservative Equity ETF will target blue-chip companies with sustainable dividends.
The firm’s three new fixed-income funds will offer investors exposure to ultra-short-term, dollar-hedged international bonds and a portfolio of high-yield municipal bonds. (Reporting by Suzanne McGee; Editing by Alexander Smith)
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