Capital Group's Active ETFs Target Advisor Needs

How Capital Group taps advisor demand with active, transparent ETFs


 

Capital Group, a long-established investment management firm with a loyal following among financial advisors, is making waves in the ETF industry with its focus on active, transparent strategies. In an interview with etf.com, Scott Szever, Capital Group's Head of ETF Product and Capital Markets, discussed the company's approach to ETFs and its plans for the future.  

Szever highlights the importance of understanding advisor needs: "Prior to our launch of ETFs in February of 2022, we spent a lot of time listening to our advisors to understand their needs." This focus on core building block solutions resonated with advisors, leading to the creation of 14 active transparent ETFs managing roughly $25 billion in assets under management. "Each one of those ETFs are focused to the asset allocation categories that our advisors use today," says Szever.

Capital Group's ETFs are finding a sweet spot in advisor portfolios. "Our advisors are really embracing that as we're seeing very strong flows into both our active equity and fixed income ETFs," says Szever. Their high-conviction, long-term approach is also proving attractive, particularly in underserved categories. For example, the Capital Group Core Balanced ETF (CGBL) currently leads in cash flows year-to-date and is the largest active ETF in its category. The fund was also a finalist for the “Best New Active ETF” category for the etf.com Awards 2024.  

Looking ahead, Capital Group sees a significant opportunity in active fixed income ETFs. "You know, up until recently, active fixed income ETFs weren't really available in the market," says Szever. "We really believe this year the ETF fund flow story will be about active fixed income ETFs and we believe that we can really lead in that category."

This focus on active fixed income aligns with Capital Group's long-standing expertise in active management and their commitment to meeting the evolving needs of financial advisors. With a proven track record and a clear understanding of advisor preferences, Capital Group is well-positioned to capitalize on the growing demand for active, transparent ETF solutions.