Capital Group launched three active bond exchange traded funds on the New York Stock Exchange today.
The three new strategies are:
- The Capital Group Short Duration Income ETF ((CGSD )), a short-duration income fund that pursues high-quality income with low interest rate sensitivity.
- The Capital Group Municipal Income ETF ((CGMU )), a core municipal fund that pursues tax-exempt income consistent with capital preservation while seeking total return.
- The Capital Group U.S. Multi-Sector Income ETF ((CGMS )), a diversified U.S. multi-sector income fund that pursues a high level of current income and the opportunity for capital appreciation.
These new funds complement the five equity ETFs and one fixed income ETF Capital Group launched in February, bringing the firm’s available suite of ETFs to nine.
“Now is a good time for financial professionals and investors alike to consider active fixed income ETFs,” said Mike Gitlin, head of fixed income for Capital Group, in a news release. “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. We believe these will help investors manage short-term cash needs, generate tax-exempt income, and benefit from some of the best starting yields we’ve seen in credit in years.”
Gitlin added: “It’s more vital than ever that investors have access to high-quality, low-cost, actively-managed fixed income ETFs. As inflation continues to persist and we enter bear market territory, having a strong allocation to bonds in a tax-efficient vehicle like our new fixed income ETF strategies can help investors with a smoother ride.”
After only a few months, Capital Group’s actively managed core focused ETFs have been a hit with investors, racking up $3.6 billion in assets under management despite market turmoil.
“Capital Group crashed the ETF party earlier in 2022 and has had initial success aided by advisor demand,” said Todd Rosenbluth, VettaFi’s head of research. “The new active fixed income products further support asset allocation needs.”
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