MutualFundWire.com: A $2.2T-AUM Firm Debuts Its 2nd ETF Batch

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Friday, October 28, 2022

A $2.2T-AUM Firm Debuts Its 2nd ETF Batch

The team at a $2.2-trillion-AUM (as of June 30) mutual fund firm is increasing the size of their new ETF suite by 50 percent with a trio of new launches.

Holly Framsted
Capital Group
Director of ETFs

Yesterday, Mike Gitlin, head of fixed income for Capital Group [profile], and Holly Framsted, director of ETFs, unveiled the launch of three ETFs, boosting Cap Group's ETF family to nine funds in total (including four fixed income ETFs). The Capital Group Municipal Income ETF (CGMU on the NYSE Arca, Inc.), the Capital Group Short Duration Income ETF (CGSD), and the Capital Group Municipal Income ETF (CGMU) all debuted on Tuesday as series of the Capital Group Fixed Income ETF Trust. (Cap Group's first six ETFs, which debuted back in February, have since grown to more than $3 billion in combined AUM as of September 30.)

Capital Research and Management Company serves as investment advisor to all three new funds, and American Funds Distributors, Inc. serves as distributor and principal underwriter. Like Cap Group's other offerings, all three of these ETFs are actively managed.

CGMS comes with an expense ratio of 39 basis points. Its PM team includes Damien McCann, Scott Sykes, and Shannon Ward (all partners with Capital Fixed Income Investors), as well as Xavier Goss (a vice president on the same team).

CGSD comes with an expense ratio of 25 bps. Its PM team includes Vincent Gonzales and Steven Lotwin, a pair of partners at Capital Fixed Income Investors.

CGMU comes with an expense ratio of 27 bps. Its PM team includes three Capital Fixed Income Investors partenrs: Mark Marinella, Jerome Solomon, and Courtney Wolf.

"Now is a good time for financial professionals and investors alike to consider active fixed income ETFs," Gitlin states. "We've deliberately built our three new active ETFs in categories that have historically been underserved by active ETF managers including multisector bond, municipal national intermediate bond, and short-term bond."

"Our low-cost, actively managed ETFs are designed to sit at the core of an investor's portfollio,' Framsted states.

The three new ETFs' other service providers included: Dechert LLP as counsel; PricewaterhouseCoopers LLP as independent accounting firm; and State Street Bank and Trust Company as administrator, custodian, dividend disbursing agent, and transfer agent.

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