Capital Group's initial foray into exchange-traded funds will not be its final one, according to its head of ETFs.

Capital Group's initial foray into exchange-traded funds will not be its final one, according to its head of ETFs.
Capital Group's initial foray into exchange-traded funds will not be its final one, according to its head of ETFs.

The exchange-traded fund space just welcomed another heavy hitter.

This week, Capital Group, which manages over $2.5 trillion in assets, introduced six new ETFs on the New York Stock Exchange.

Capital Group's funds are actively managed and reflect typical core portfolio holdings, but differ from their popular mutual funds, which are often held in retirement plans.

There are five equity-based offerings and one focused on fixed income:

  • (CGGR)
  • (CGUS)
  • (CGDV)
  • (CGXU)
  • (CGGO)
  • (CGCP)

Capital Group's 90-year track record supports "building block" strategies for simplifying the investment process, as explained by Holly Framsted, the firm's head of ETFs, on Wednesday's "ETF Edge" show on CNBC.

"We are now able to offer Capital Group's proven active management strategies in the form of ETFs due to recent regulatory changes," she stated.

Framsted believes that the inflows towards passive ETFs are due to investors opting for core investments rather than niche products.

This year, approximately $15 billion in ETF inflows can be attributed to actively managed strategies, which account for roughly 10% of the total inflows, according to ETF Trends.

"Our strategies are not meant to be flashy objects," she stated. "Instead, it's about identifying the best vehicles for our clients and expanding our service capabilities."

This is just the beginning for Capital Group, Framsted said.

"The six ETFs are our entry into the marketplace, but this is not the end for us," she said. "I anticipate that our product lineup will grow, but we will approach it with caution."

Over 790 actively managed ETFs are currently accessible to investors, as per ETF Trends.

Active vs. passive debate heats up as Capital Group enters the ETF space
by Lizzy Gurdus

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