When Capital Group launched its first ETFs just over four years ago, it coincided with a personal milestone. It was the same quarter I joined TMX VettaFi. Back then, some people thought Capital Group was late to the active ETF market. However, at the end of the first quarter of 2026, they were the third largest player in their space. I sat down with Capital Group’s Scott Davis at the Investment Company Institute (ICI) conference to discuss the firm’s rapid growth.
Key Takeaways
- Capital Group gathered $150 billion in just over four years of trading.
- Many advisors are pairing CGDV and CGGR as an alternative to concentrated index ETFs.
- Active ETFs gathered 42% of net inflows in the first quarter of 2026.
The industry backdrop has fundamentally shifted since their debut. As Capital Group was about to enter the market, active ETFs represented just 9% of net inflows. As of March 2026, they were 42% of the new money. Driven by this momentum, the firm’s U.S. suite recently managed $150 billion. Crucially, adoption spans all advisory channels, with roughly one-fifth of Capital Group’s ETF users residing in the RIA space, according to Davis.
Redefining Core Portfolio Construction
“When we launched our ETF suite a little over four years ago, we felt strongly that if we could bring Capital Group’s investment process into the ETF vehicle it would resonate with advisors," Davis noted. “We would bring transparency, we would bring tradeability, we’d bring tax efficiency. And we would do all of that, but rooted in the capital investment process that we have.”
Unlike some managers like Dimensional or JPMorgan that leaned into quantitative or options-based strategies, Capital Group has carved out a distinct path. As a traditional fundamental active shop, the firm has focused on delivering pure fundamental active ETFs to the marketplace.
This strategy has been particularly powerful in fixed income. Capital Group systematically built out its bond suite from conservative short-duration vehicles to high-income municipal products. Among the standouts is the $6 billion Capital Group Core Municipal Income ETF (CGMU ), which offers an active approach to tax-exempt investing. For those seeking yield across various fixed-income buckets, the $5 billion +Capital Group Multi-Sector Income ETF+ (CGMS ) offers a diversified, dynamic income play.
Models and Innovation Beyond the Product Line
For the company, future asset growth is less about rolling out a continuous stream of new products and more about changing how advisors implement strategies. The firm is already a top-three model portfolio provider according to industry data sources like Broadridge. It is leveraging its scale through eight highly successful model suites.
Capital Group is doubling down on this ecosystem with a recently rolled-out model portfolio service. This initiative allows financial advisors to pair Capital Group ETFs with other institutional strategies of their choice. They can design highly tailored, client-specific portfolios.
“It’s not necessarily the next one or two products that roll off the line”, explained Davis. ”At the end of the day, a lot of the investors’ needs can be satisfied with strategies that are focused on long term objectives in the core of a portfolio.”
Navigating Market Concentration
Advisors are increasingly leveraging this core philosophy to hedge against severe concentration risks in the broader market. According to Davis, two of the firm’s flagship equity offerings are frequently paired together to offer a balanced alternative to top-heavy indices like the S&P 500 or Russell 1000.
The $36 billion Capital Group Dividend Value ETF (CGDV ) targets high-quality, income-producing corporations and the $25 billion Capital Group Growth ETF (CGGR ) offers a strong actively managed combination. To Davis, it is a reminder. Even as the wrapper evolves, long-term investor success remains rooted in a proven, disciplined investment process.
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