A strong management team and sound investment process underpin Capital Group Core Balanced ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns a High People Pillar rating. The strategy's investment approach stands out and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight the North America region and has a substantial overweight in the basic materials sector compared with category peers. The strategy's parent organization earns the firm a High Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Capital Group Core Plus Income ETF

Broadcom

Microsoft

Alphabet

Canadian Natural Resources

Eli Lilly

UnitedHealth Group

Vertex Pharmaceuticals

Booking Hlds

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, clearly defined, repeatable execution. Capital Group Core Balanced ETF earns a High Process Pillar rating. The leading factor in the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.6 stars. The parent firm's five-year risk-adjusted success ratio of 65% also supports the rating. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Their impressive success ratio suggests that the firm does well for investors and that this fund may benefit from that. The firm's five-year retention rate of 86% supports the rating as well.

This strategy produces a fixed-income weighting that hews closely to the typical Moderate Allocation peer but holds more assets in equities, with a 32% to 63% fixed-income to equity composition. Its equity sleeve is consistently tilted toward both larger market-cap and value-oriented companies versus the category average. The strategy has three region or sector biases compared to category peers. The most meaningful exposure is to the North America region, where the portfolio is typically overallocated. It also maintains an overweight bias toward the basic materials sector. And finally, in the fund's most recent portfolio, more assets were allocated to developed markets regions. Although, this bias has not existed over time. 

 The portfolio has allocations in its top two sectors, healthcare and basic materials, that are similar to the category. The sectors with low exposure compared to category peers are utilities and industrials, with utilities underweighting the average portfolio by 2.7 percentage points of assets and industrials similar to the average. The portfolio is overweight in North America by 6.3 percentage points compared with the category average, and Developed Asia's allocation is similar to its peers. The regions with low exposure compared to their category peers are Japan and United Kingdom; however, the allocations are only 2.2 percentage points and 1.8 percentage points underweight the average, respectively.

 The fund’s bond sleeve takes on more interest rate risk as its average duration is 5.6 years compared with the category average’s 5.1 years.

High

Process

Capital Group Core Balanced ETF earns a High People Pillar rating. Alan N. Berro, the longest-tenured manager on the strategy, provides strong guidance, offering over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 4.3 stars, indicating that their risk-adjusted returns exceeded the category average. Alan N. Berro is supported by an experienced team, being able to draw on four additional listed managers, who average 18 years of listed portfolio management experience.  The highest personal investment in this offering by any of its managers is at least $1 million. An investment of that size is large enough to align managers' interests with investors. 

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

Capital Group’s adaptability while staying true to its identity maintains its High Parent rating.
The firm is under a new but familiar kind of leadership. Mike Gitlin, previously the head of fixed income and global trading, took over as CEO in October 2023. He replaced Tim Armour, who had been chairman and CEO since 2015. Rob Lovelace, the firm’s vice chair and president, also stepped off the management committee to pave the way for new leadership. Martin Romo and Jody Jonsson, who both head up an investment subsidiary, became chairman and CIO, and vice chair, respectively. Romo, Jonsson, and Lovelace retain their roles as principal investment officer on funds. The transition demonstrated a considered succession plan and a commitment to keeping the leadership team-oriented and investor-heavy.
Meanwhile, the firm has been thoughtful about other changes. Recognizing investor preferences, Capital since early 2022 has launched 14 exchange-traded funds—seven equity, six fixed income, and one allocation. The new funds, branded under the Capital Group name, are distinct from but rhyme with some of the legacy American Funds mutual funds. The firm also launched active-passive models with industry peers that leverage its mutual fund lineup. All these new investment options employ Capital’s time-tested investment philosophy, use its hallmark multimanager system, and draw from its huge pool of seasoned investors.

Parent

Capital Group Core Balanced ETF

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Capital Group Lists 5 New Active ETFs

LOS ANGELES, Sept. 28, 2023 /PRNewswire/ -- Capital Group launched five active exchange-traded funds (ETFs) today on the New York Stock Exchange. This compelling lineup includes its first-ever multi-asset ETF, along with two fixed income and two equity ETFs, significantly augmenting Capital Group's existing selection of active ETFs to a total of 14.

News for Capital Group Core Balanced ETF ETF (CGBL)