Capital Group this week launched its first small- to mid-cap active exchange-traded fund, Capital Group U.S. Small and Mid-Cap ETF, ticker CGMM, which will invest in companies with market cap up to $56 billion. The fund has a 0.51% expense ratio.
Capital Group, which has $2.8 trillion in assets under management, said the fund will meet pent-up advisor demand for active investing into small- and mid-cap stocks. The firm plans to include the new ETF in a model portfolio launch later in the first quarter.
The firm's website says the fund seeks capital appreciation and aims to identify possible “acorns to oaks" companies with attractive opportunities for long-term compounding.
The ETF can continue to hold securities that appreciate beyond the market cap limit but can’t make new purchases over $56 billion.
Capital now has 22 active ETFs with about $50 billion in AUM. Principal investment officer Roz Hongsaranagon leads CGMM's portfolio management team, which also includes Matt Hochstetler, Dimitrije M. Mitrinovi and Andraz Razen.
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