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Actively managed to pursue better investment results
Like passive ETFs, active ETFs can offer transparency, intraday liquidity and tax efficiency. Active management offers an additional perk: The opportunity to pursue better-than-market returns. Backed by 90+ years of experience, Capital Group’s core-focused active ETFs are designed to help support investors in this pursuit.
Introduction to Active ETFs
Next era of ETFs
The benefits of active ETFs
In this video, Capital Group's Head of ETFs Scott Davis breaks down the advantages of investing in active ETFs with the three T's: tax efficiency, transparency and tradability.
Questions from the field
Check out these frequently asked questions from financial advisors about ETF investing
Passive ETFs
- Management style: Passively managed
- Objective: Track the returns of an index or benchmark
- Flexibility: Holdings are limited to the composition of an underlying index
Active ETFs
- Management style: Actively managed by portfolio manager(s)
- Objective: Outperform the returns of an index or benchmark
- Flexibility: Portfolio managers can make investment decisions without index constraint
Tax efficiency
ETFs trade on a secondary market and use in-kind transactions, helping to minimize taxable events within the fund.
Returns
Fund managers on active ETFs rely on their experience to select holdings, aiming for returns that surpass a benchmark.
Client goals
ETFs can be a core component of client portfolios, helping investors realize their long-term financial objectives.
Flexibility
These funds can be traded throughout the day, similar to stocks.
Mutual fund
- Trading mechanism and control over price: Priced daily using the next available net asset value (NAV), with transactions executed at the end-of-day price.
- Tax efficiency: Taxes on gains can occur when others in the fund sell their shares, potentially leading to capital gains distributions for all investors in the fund.
- Transparency: May offer monthly or quarterly views into holdings, often days or weeks after the period ends.
ETF
- Trading mechanism and control over price: Trades intraday on an exchange, allowing for real-time buying and selling at current market prices.
- Tax efficiency: ETF selling activity typically occurs in a secondary market, so only the individual investor incurs a capital gain distribution, if any, when they sell their shares. If the secondary market can't support selling activity, it will go to the primary market where ETF portfolio managers may use in-kind redemptions to help minimize gains within the fund.
- Transparency: Typically discloses holdings daily, providing investors with frequent updates on what securities they own.
Capital Group’s active ETFs are backed by over 90 years of active management experience and proprietary research sourced from extensive fieldwork. Under The Capital System™, each portfolio is steered by a team of managers, each contributing their unique insights and strongest investment ideas — offering a richer diversity of perspectives than one manager alone. Let our team of portfolio managers, analysts and traders monitor and adjust investments, so you have more time to better serve your clients and grow your practice.
Capital Group ETFs and ETF models available to LPL advisors
Explore the five LPL Research Capital Group ETF Core Models, which are now available on MWP
Click the tabs below to view active ETFs available at LPL.†
Active ETFs designed to pursue superior outcomes
Capital Group's ETF Education Center
Access additional resources for navigating the crowded, ever-evolving ETF market.
