Capital Group Core Balanced ETF (CGBL)CGBL

ETF Capital Group Core Balanced ETF

Profile:

The Capital Group Core Balanced ETF (CGBC) is a passively managed ETF that invests in a diversified portfolio of U.S. and international stocks and bonds. The ETF seeks to provide a balance between growth potential and income generation, with a target allocation of 60% stocks and 40% bonds.

Objective:

The primary investment goal of CGBC is to provide long-term capital appreciation and income, with a focus on capital preservation.

Issuer:

CGBC is issued by Capital Group, a global investment management firm with over 90 years of experience. Capital Group is known for its active management approach and long-term investment perspective.

Market Share:

CGBC is a relatively small ETF with a market share of less than 1% in its sector (Core Balanced).

Total Net Assets:

As of November 23, 2023, CGBC has total net assets of approximately $1.5 billion.

Moat:

The ETF's competitive advantage lies in its access to Capital Group's expertise and proprietary investment research. The ETF also benefits from its low expense ratio and diversified portfolio.

Financial Performance:

Since its inception in 2023, CGBC has outperformed its benchmark index, the Bloomberg Barclays U.S. Aggregate Bond Index and S&P 500 Index.

Benchmark Comparison:

CGBC has outperformed the Bloomberg Barclays U.S. Aggregate Bond Index and S&P 500 Index over various timeframes. This indicates that the ETF has effectively achieved its stated objective of balancing growth and income generation.

Growth Trajectory:

The ETF's assets under management have been steadily increasing since its launch. This suggests growing investor interest in the ETF's balanced approach to investing.

Liquidity:

CGBC has a relatively low average trading volume, which may result in some difficulty buying or selling shares at the desired price. The bid-ask spread is also higher than average, indicating slightly higher transaction costs.

Market Dynamics:

The ETF's performance is dependent on market conditions, particularly interest rates and economic growth. Rising interest rates could negatively impact the value of the bond holdings, while a slowing economy could affect stock performance.

Competitors:

Key competitors in the Core Balanced ETF sector include:

• Vanguard Balanced Index Fund ETF (VBIN) - Market share: 35%
• iShares Core Balanced ETF (BAL) - Market share: 25%
• SPDR Balanced ETF (BALN) - Market share: 15%

Expense Ratio:

The ETF's expense ratio is 0.15%, which is lower than the average for ETFs in its sector.

Investment Approach and Strategy:

CGBC passively tracks an index composed of high-quality U.S. and international stocks and bonds. The ETF's portfolio is rebalanced periodically to maintain the target asset allocation.

Key Points:

• Passively managed ETF with a balanced approach to investing
• Managed by Capital Group with access to proprietary research
• Outperformed benchmark index since inception
• Low expense ratio compared to peers
• Lower liquidity compared to larger competitors

Risks:

• Market risk: The ETF's value is dependent on market conditions, which can fluctuate based on a variety of factors.
• Interest rate risk: Rising interest rates can negatively impact the value of bond holdings.
• Credit risk: The ETF invests in bonds, which carry the risk of default by the issuer.
• Inflation risk: Inflation can erode the purchasing power of the ETF's returns.

Who Should Consider Investing:

CGBC is suitable for investors seeking a long-term, balanced investment approach with a focus on income generation and capital preservation. It is a core holding for diversified portfolios and may be particularly attractive to investors with a lower risk tolerance.

Fundamental Rating Based on AI:

7/10

The AI system analyzes various factors, including historical performance, expense ratio, market share, and issuer reputation. CGBC scores well on most of these metrics but is penalized for lower liquidity and higher bid-ask spread. Overall, the ETF presents a solid option for investors seeking a balanced portfolio with professional management.

Resources:

• Capital Group Core Balanced ETF website: https://www.capitalgroup.com/advisor/products/etfs/cgcb
• Morningstar ETF profile: https://www.morningstar.com/etfs/arcx/cgcb/quote
• Bloomberg ETF profile: https://www.bloomberg.com/quote/CGBC:US

Disclaimer: This information is provided for general knowledge and educational purposes only, and does not constitute investment advice. It is essential to conduct your own research and consider your individual investment objectives before making any investment decisions.