CGDV ETF

In February, Los Angeles-based investment manager Capital Group will mark three years since it launched its first actively managed transparent ETFs.

Capital Group Dividend Value ETF offers strong capital appreciation potential and a reasonable expense ratio of 0.33%. Recent sector rebalancing towards consumer-facing companies aligns with favorable economic conditions, enhancing CGDV's growth potential. Pairing CGDV with SCHD provides a balanced strategy, combining capital appreciation from CGDV and higher dividend income from SCHD.

Dividend-paying stocks provide a steady income stream and help mitigate potential losses during weaker market periods.

Actively managed CGDV combines dividends and value in a portfolio of chiefly high-quality stocks from the large-cap echelon with a small international exposure. The current version of the Capital Group Dividend Value ETF portfolio has 50 equities, with most of the net assets allocated to industrials. Real estate is absent. I believe the Fund deserves an upgrade owing to its impressive performance. It solidly beat IVV over March 2022–July 2024, capturing less downside and more upside.

Capital Group Dividend Value ETF is a good option for low-risk investors looking to outperform the tech-driven bull run. The ETF's portfolio strategy of holding stakes in fundamentally strong dividend-paying value and growth stocks from various sectors contributes to its high-risk adjusted returns. CGDV's total returns have outperformed the broader stock market index in the last year, and its momentum is expected to continue in the short and long-term.

CGDV is a U.S. large-cap equity fund with a slight dividend and value tilt. CGDV has outperformed since inception, and quite significantly so. It has stronger returns than the S&P 500 and most dividend ETFs, including SCHD. It only yields 1.5%, but is moderately cheaper than average.

CGDV only has a short two-year track record, but this actively managed ETF has already demonstrated it's possible for dividend strategies to outperform the broader market. While CGDV lacks the downside protection offered by many peers in the large-cap value ETF category, it's one of the few to offer nearly 10% estimated earnings per share growth. This feature means dividend ETF investors don't necessarily have to sacrifice total returns for income, though CGDV's modest 1.81% expected dividend yield is not competitive.

Capital Group is one of the largest asset managers in the world, with some very large ETFs. That said, it still has just about ten ETFs per VettaFi's ETF Database.

To celebrate the pending Exchange conference, VettaFi and some key industry partners were at the Nasdaq MarketSite to help ring the opening bell last week. Exchange will be the industry's largest ETF-, and most valuable advisor-focused, conference.