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Capital Group Sets Fees for Its First ETFs

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What You Need to Know

  • The competitive fees position Capital Group to attract more assets when its ETFs launch.

When Capital Group joins the ranks of mutual fund companies that have entered the ETF market early next year, it will be launching a suite of active ETFs that are very competitively priced.

Management fees for the six ETFs — five equity and one bond ETF — will range from 0.33% for its Dividend Value (CGDV) and Core Equity (CGUS) ETFs to 0.54% for its International Focus Equity ETF 0.54% (CGXU), according to the firm’s recent filings with the Securities and Exchange Commission.

Fees for the other three ETFs are 0.39% for the Capital Group Growth ETF (CGGR), 0.47% for the firm’s Global Growth ETF (CSGO) and 0.34% for its Core Plus Income ETF (CGCP).

All the ETFs are fully transparent, disclosing their holdings on a daily basis, and none are clones of existing funds. The equity ETFs are designed as complements to the firm’s existing mutual funds and the Core Plus Income ETF is a new core strategy for the asset manager that is expected to anchor a suite of future bond ETFs, according to Holly Framsted, head of ETFs at Capital Group.

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Todd Rosenbluth, head of ETF and Mutual Fund Research at CFRA, noted that while the upcoming ETFs “are not clones of American Funds mutual funds they leverage the same team and resources, which should position the ETFs for asset gathering in 2022.”

He added that the ETFs’ relatively low fees take “advantage of the firm’s scale … are comparable to funds run by the firm with a similar investment philosophy,” minus the funds’ advisor-based sales loads.

Capital Group currently manages over $2 trillion in assets.