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February 23, 2022 at 02:20 PM
Capital Group, one of the last major holdouts to the ETF revolution, is wading in after sitting on the sidelines for over a decade.
The company is launching six actively managed exchange-traded funds that are set to debut on the New York Stock Exchange Thursday.
One will focus on fixed income, three will invest primarily in U.S. equities, and two will be devoted to global stocks. The funds’ expense ratios range from 0.34% to 0.54%.
The move marks a shift for the Los Angeles-based company, which had over $2.7 trillion in assets as of December and is the last major money-management firm to launch its first ETF.
But Holly Framsted, Capital Group’s director of ETFs, said the active ETF space doesn’t yet have a “standout winner” and Capital Group will fill a void by providing funds that can sit at the core of an investor’s portfolio.
“I actually don’t think we’re that late,” said Framsted. “We’ve seen a lot of niche products come to market that really aren’t serving those core needs of our clients.”
The launch is the culmination of a months-long effort by Capital Group, which filed regulatory documents for the ETFs in August.
It signals that Capital Group is seeking to directly challenge rivals like Vanguard Group Inc. and BlackRock Inc. by making the case that an active fund can be at the center of a portfolio, rather than a complement, according to Bloomberg Intelligence’s Eric Balchunas, who tracks the ETF industry.
