The exchange-traded fund space just welcomed another heavy hitter.
Capital Group, which oversees north of $2.5 trillion in assets, threw its hat into the ring this week with six brand-new ETFs that launched Thursday on the New York Stock Exchange.
The funds are all actively managed and reflect typical core portfolio holdings. They are distinct from Capital Group’s popular mutual funds, many of which are held in retirement plans.
There are five equity-based offerings and one focused on fixed income:
The goal is to simplify the investment process by offering “building block” strategies backed by Capital Group’s 90-year track record, the firm’s head of ETFs, Holly Framsted, told CNBC’s “ETF Edge” on Wednesday.
“With recent regulatory change, we believe we are now positioned to package Capital Group’s time-tested active management strategies in the ETF vehicle,” she said.
Though passive ETFs attract the majority of the industry’s inflows, Framsted sees that as investors choosing core investments over more niche products.
Actively managed strategies account for roughly 10% of this year’s ETF inflows, or about $15 billion, according to ETF Trends.
“These aren’t intended to be shiny objects,” she said. “For us it’s about recognizing that we can expand the clients that we’re able to service by offering our strategies in the vehicles of choice for them.”
This is just the beginning for Capital Group, Framsted said.
“The six ETFs … are absolutely our entrance into the marketplace, but this isn’t where it ends for us,” she said. “I expect that the product lineup will continue to expand, but we’re going to take a very patient approach.”
Nearly 800 actively managed ETFs are available to investors today, according to ETF Trends.
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