A sound investment process and strong management team underpin Capital Group Global Growth Equity 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 effective investment philosophy supports a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in yield exposure and momentum exposure compared with category peers. High yield exposure is attributed to holding more stocks with high dividend or buyback yields. And momentum exposure is rooted in holding stocks currently on a winning streak. The strategy’s management team earns a High People Pillar rating. 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

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Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Capital Group Global Growth Equity ETF earns a High Process Pillar rating. 

The predominant contributor to the rating is its parent firm's excellent 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 69% also contributes to the process. 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 respectable 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 85% contributes to the process as well.

 This strategy, over time, has consistently held more undervalued companies, compared with peers in the Global Large-Stock Growth Morningstar Category. But in terms of size exposure, it is similar to the average. Examining additional factor exposure, the managers have consistently overweighted yield-paying companies compared with Morningstar Category peers in recent years, shown by the portfolio's high exposure to stocks paying dividends or buying back shares. Higher-yield stocks can provide steady income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has also had more exposure to high-momentum stocks in recent years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. In the most recent month, however, the fund's Momentum exposure was in line with the Morningstar Category average. During the last few years, this strategy has also tilted in favor of high-quality stocks, those that have demonstrated low financial leverage and solid return on equity. Though it may trail peers during an economic boom, this orientation contributes to helping it weather periods of economic stress better. In this month, the strategy also had more exposure to the Quality factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in healthcare by 4.8 percentage points in terms of assets compared with the category average, and its consumer cyclical allocation is similar to the category. The sectors with low exposure compared to category peers are financial services and communication services, underweight the average by 4.1 and 2.7 percentage points of assets, respectively. The portfolio is positioned across 92 holdings and is relatively concentrated. Specifically, 35.7% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 32.1% average.

High

Process

Capital Group Global Growth Equity ETF earns a High People Pillar rating. Patrice Collette, the longest-tenured manager on the strategy, provides strong guidance, bringing forward 13 years of listed portfolio management experience. The average Morningstar Rating of the strategies they manage is 4.0 stars, demonstrating stellar risk-adjusted performance. The team boasts an experienced corps of listed portfolio managers, with three others supporting Patrice Collette. Together, they average 11 years of listed portfolio management experience. As a team, they manage three investment vehicles together, with a Gold asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha in aggregate. 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 Global Growth Equity ETF

CGGO is an actively managed fund that invests in US and non-US companies of any market capitalization with growth potential.

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CGGO is an actively managed ETF by Capital Group with a portfolio that has a 12% weighted consensus upside and low debt. The current ETF holdings have a consensus EPS growth rate of 18% and 13% in YE23 & YE24 respectively. The portfolio consists of high-quality companies with global reach and potential for organic growth and M&A prospects.

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News for Capital Group Global Growth Equity ETF ETF (CGGO)