Capital Group Growth ETF's CGGR veteran mix of managers and flexible approach earn it a Morningstar Medalist Rating of Silver. 

In February 2022, Capital Group, the parent of American Funds, launched its first tranches of active exchange-traded funds, including this one. These ETFs have some of the same characteristics as the firm's long-standing mutual funds. Like those, this strategy uses the firm’s characteristic multimanager approach and is in the hands of firm veterans. Six named managers run individual sleeves here, each with at least 17 years of experience at the firm, and each have the latitude to pursue their best ideas. Alan Wilson heads up the strategy and has more than 35 years of investment experience, serving as a manager here since 2014.

By nature, the fund doesn't look like the typical large-growth fund. The managers aim to diversify across sectors and companies and can invest in overseas firms that derive notable revenue from the United States. As of March 2023, the strategy wasn't as top-heavy and chock-full of technology companies as the growth index, and its roughly 13% stake in non-U.S. stocks ranked in the highest quintile of large-growth Morningstar Category peers. 

Even though this ETF is nascent, it mirrors variable-insurance series offering American Funds IS Growth 1. Since Wilson joined the strategy in May 2014 through April 2023, its 13.8% annualized gain bested the S&P 500’s 11.3% (its broad-market prospectus benchmark) and was line in with the Russell 1000 Growth Index (the ETF has similar fees to the insurance vehicle). While this $35 billion strategy is large, it's arguably nimbler than the firm's most similar mutual fund counterpart, American Funds Growth Fund of America AGTHX, which has a different manager mix. In part because of its relative overweight in Tesla TSLA, this strategy outpaced Growth Fund of America by 2.8 percentage points, indicating the managers' individual picks can still have meaningful impact in the multimanager format.

This ETF's 0.39% net expense ratio places it among its category's cheapest actively managed funds, and its structure is more tax-advantaged than a mutual fund, making it a solid option.

Analyst Rating

A flexible large-growth approach.

Senior Analyst

Stephen Welch

Microsoft

Netflix

Broadcom

Tesla

Alphabet

Regeneron Pharmaceuticals

Visa

Intuitive Surgical

The strategy's flexible-growth strategy earns an Above Average Process rating.

Six disclosed managers and two analyst teams run separate portfolio sleeves here. Some of them prefer traditional growth stocks, others fallen angels, and still others cyclical names, though all take long-term views, leading to below-average turnover. Dividing the portfolio into separately run sleeves allows managers to stick with their highest-conviction picks and allows the strategy to benefit from varied market conditions.

The strategy’s investment universe is widespread. The fund offers broad diversification across sectors and companies. For example, while the Russell 1000 Growth Index's top 10 holdings accounted for 45% of assets as of March 2023, the strategy's top 10 only accounted for 34% of assets. The managers also can part ways with the S&P 500 and Russell 1000 Growth Index by investing up to one fourth of combined assets overseas. 

While this ETF only launched in February 2022, it mimics the firm's variable insurance series growth offering. Together the managers oversee roughly $35 billion in assets, and while it's nimbler than the firm’s comparable mutual fund counterpart American Funds Growth Fund of America AGTHX, as it gathers assets its size is something to monitor. The managers each run allocations ranging from 8% to 15% of the strategy with the analyst teams and a few undisclosed managers also running a portion. This allows their individual picks to still have meaningful impact as they coalesce together.

Above Average

Process

This fund benefits from the strengths of American Funds' multimanager system and its managers' decades of experience. It warrants an Above Average People rating.

While this ETF only launched in early 2022, it's in the hands of firm veterans. This fund tracks the firm's variable insurance series growth offering, which dates to the mid-1980s. Six named managers run individual sleeves here, each with at least 17 years of experience at Capital Group, the parent of American Funds. 

Capital Group has split the strategy's assets between subsidiaries Capital International Investors and Capital World Investors since July 2018. Alan Wilson heads up the whole fund and CWI's team, which includes Anne-Marie Peterson, Andraz Razen, and Paul Benjamin. Wilson has more than 35 years of investment experience and has served as a manager here since 2014. Irfan Furniturewala leads CII's group, which includes Mark Casey. Diversity of investment styles is a strength here as each manager can ply their unique approach to this large-growth Morningstar Category mandate. The CII and CWI teams each draw on about 50 analysts, some of whom oversee their own slices of the portfolio.

Relative to other Capital Group strategies, manager investment could be better, but that could increase as this is a relatively new offering.

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.

High

Parent

Capital Group Growth ETF

CGGR is an actively managed fund that invests predominantly in US companies of any market capitalization. The fund seeks to provide capital growth.

Capital Group Growth ETF offers a growth portfolio with a well-balanced sector allocation, providing a cushion against concentration risk. CGGR operates under a multi-manager approach, leveraging individual expertise and fostering a diversified portfolio. CGGR's top holdings include Meta Platforms, Microsoft, Netflix, Alphabet, and Tesla, offering exposure to various sectors and growth opportunities.

CGGR: Growth With Less Tech, And A Winner

Capital Group Dividend Value ETF

Capital Group is one of the largest asset managers in the world, with some very large ETFs. That said, it still has just about ten ETFs per VettaFi's ETF Database.

Capital Group's Framsted on Active Fixed Income ETFs

Capital Group Growth ETF is an actively managed growth fund combining multi-manager allocation and quantitative risk management. Its uniqueness is to offer a growth portfolio surprisingly light in technology, with a touch of value and quality. Nevertheless, for now, CGGR's track record is still short and unconvincing.

CGGR: A Growth ETF Surprisingly Light In Technology

Capital Group Core Balanced ETF

Capital Group Core Plus Income ETF

Capital Group World Dividend Growers Etf

In September, Capital Group expanded its already popular active ETF lineup. The five new ETFs included two new equity ETFs, two new fixed income ETFs, and one asset allocation ETF.

How Capital Group's New Active ETFs Are Positioned for 2024

The Capital Growth Group ETF is a relatively newly-launched actively-managed growth fund managed by six portfolio managers with differing investment backgrounds and experiences. Fees are 0.39%. CGGR has tracked low-cost plain vanilla funds well since its February 2022 launch, outperforming SPYG but slightly lagging VUG. Overall, its short track record is mediocre. The fund operates under The Capital System, aiming to large-cap growth stocks trading at attractive valuations. My analysis reveals a preference for stocks with lower price-earnings-growth, or PEG, ratios.

CGGR: Capital Group's Growth ETF Sacrifices Too Much Quality

Avantis International Small Cap Value ETF

Avantis Emerging Markets Equity ETF

Avantis US Equity ETF

Avantis U.S. Small Cap Value ETF

Vanguard Total Bond Market ETF

Dimensional US Core Equity 2 ETF

Dimensional International Core Equity Market ETF

Dimensional Core Fixed Income ETF

Dimensional Emerging Markets Core Equity 2 ETF

Dimensional Emerging Markets Value ETF

Dimensional International Core Equity 2 ETF

Dimensional International Value ETF

Dimensional US Equity ETF

Dimensional US High Profitability ETF

iShares MSCI Emerging Markets ETF

Fidelity Total Bond ETF

First Trust TCW Opportunistic Fixed Income ETF

Janus Henderson AAA CLO ETF

JPMorgan Equity Premium Income ETF

JPMorgan Nasdaq Equity Premium Income ETF

Janus Henderson Mortgage-Backed Securities ETF

Putnam ESG Core Bond ETF

PGIM Ultra Short Bond ETF

And, plenty of ink has been spilled about how much money has gone into active ETFs in 2023, and from a pure top-line flows perspective, it's true. A significant chunk of the $289 billion that has entered U.S.-listed ETFs year to date went into active products — 22%, in fact.

2023's Overactive Active ETF Flows Are Mostly a Mirage

Capital Group Global Growth Equity ETF

Capital Group Municipal Income ETF

Capital Group International Focus Equity ETF

Capital Group launched its first set of active ETFs in early 2022 with much success and has continued to grow. The impressive first 12 months as an ETF provider included crossing the $7 billion in assets under management mark.

Capital Group Provides Advisors Ability to Manage Risk Tolerance

Blackrock Large Cap Value Etf

WisdomTree Japan Hedged Equity Fund

Franklin FTSE Japan ETF

iShares Core S&P 500 ETF

iShares Russell 2000 ETF

JPMorgan Active Small Cap Value ETF

VanEck Morningstar Wide Moat ETF

American Century U.S. Quality Growth ETF

iShares MSCI USA Quality Factor ETF

Astoria US Quality Kings Etf

T Rowe Price Blue Chip Growth ETF

Vanguard FTSE Developed Markets ETF

Harbor Long-Term Growers ETF

After a slow start to asset gathering, U.S.-listed equity ETFs were in vogue during the summer. At the end of August, the asset category had $165 billion of net inflows, more than $125 billion for fixed income.

Equity ETFs Are Shining, But What's Next?

CGGR is a relatively novel investment vehicle targeting U.S. large and mid caps that "appear to offer superior opportunities for growth of capital," also maintaining a modest footprint overseas. There are numerous robust growth stories in its portfolio. Nevertheless, there are valuation concerns, a few quality disadvantages, as well as performance nuances.

CGGR: Banner 2023 Amid Growth Rotation, Issues Under The Hood

PIMCO Active Bond ETF

Vanguard Dividend Appreciation ETF

Though a year ago our name changed to VettaFi, ETFs are still at the core of what we do. We run two widely viewed websites — ETF Trends and ETF Database — and billions of dollars are invested in ETFs tied to VettaFi-run indexes.

Chart of the Week: Advisors Pair ETFs With Other Investments

Simplify Short Term Treasury Futures Strategy ETF

WisdomTree Bloomberg Floating Rate Treasury Fund

In this week's edition of the ETF Issuer League, WisdomTree, Dimensional, Simplify, and Capital Group stood out the most. In each of their respective tiers, those firms saw stand-out inflows or surpassed or neared new milestones.

Issuer League: WisdomTree, Dimensional Up

Comcast

Edison

General Electric

With $28 billion of net inflows in the first four months of 2023, according to VettaFi LOGICLY data, active ETF investments continue to gain traction with advisors and end clients. Two of the firms benefiting from the trend are Dimensional Funds and Capital Group.

Active ETF Flows Strong in 2023 — Why?

iShares Core Moderate Allocation ETF

Capital Group Short Duration Income ETF

SPDR SSgA Global Allocation ETF

After an impressive first year as an ETF provider, during which it crossed the $7 billion in assets-under-management mark, Capital Group yesterday filed for three new actively managed ETFs.

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While ETFs have historically been an index-only business, more investors are pouring their money into active ETFs so far this year than they did in 2022.

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In late February 2022, Capital Group launched its first six actively managed ETFs, and wow, what a first year it has been. The firm, which is well known for the American Funds mutual fund lineup, crossed the $7 billion threshold yesterday, aided in part by the addition of three more bond ETFs in October.

Capital Group Has Impressive First ETF Year

ARK Innovation ETF

Fidelity Blue Chip Growth ETF

First Trust Mid Cap Value AlphaDEX Fund

Renaissance IPO ETF

iShares Morningstar Small-Cap Growth ETF

SPDR S&P Kensho New Economies Composite ETF

Vanguard Mega Cap Growth ETF

Fidelity NASDAQ Composite Index

Invesco QQQ

Invesco Nasdaq 100 ETF

Invesco S&P 500 High Beta ETF

Invesco S&P 500 Low Volatility ETF

Vanguard Small-Cap Growth

You might be wowed with the Invesco QQQ Trust's 8.3% gain this year. Until you see the ETFs beating it, including those tied to the S&P 500.

Think The Nasdaq Is Soaring? Check Out 14 ETFs Doing Even Better

Capital Group Core Equity ETF

iShares Core S&P Total U.S. Stock Market ETF

Vanguard Total Stock Market ETF

Advisor ‘unlikely' to recommend Capital Group's actively managed funds.

Active ETFs Allan Roth Says You Might Consider

With an impressive $2 billion of ETF assets gathered since launching their first ever ETF products in February, Capital Group has set the stage for new products in the fall.

Capital Group Plans ETF Expansion After Hitting $2 Billion in Less Than 5 Months

ARK Web x.0 ETF

Davis Select Financial ETF

Davis Select U.S. Equity ETF

Despite representing just 4% of ETF assets at the end of the first quarter of 2022, actively managed ETFs pulled in 11% of the net inflows in the first three months of the year.

The Active ETF Tent Is Growing Larger

Capital Group, best known for its American Funds line of mutual funds, finally dipped a toe into the exchange-traded fund (ETF) world last week. And unlike many fund launches of the past few years, Capital Group's ETFs aren't chasing emerging investment themes or joining competitors in a race to zero fees.

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The firm's first six exchange-traded funds are actively managed strategies designed to be core portfolio holdings, says Capital Group's Holly Framsted.

Capital Group's first foray into exchange-traded funds won't be its last, its head of ETFs says

Capital Group launched its first suite of six active, transparent exchange traded funds on the New York Stock Exchange today, consisting of one fixed income core plus income strategy, three equity strategies that invest primarily in the U.S., and two equity strategies that cover international and global. “The active ETF market is still in its [.

Capital Group Enters ETFs Marketplace with 6 New Active Funds

News for Capital Group Growth ETF ETF (CGGR)