Capital Group Core Plus Income ETF (CGCP)CGCP

ETF Summary: Capital Group Core Plus Income ETF (CPO)

Profile:

Capital Group Core Plus Income ETF (CPO) is a diversified multi-asset income ETF that seeks to provide long-term income and capital appreciation with moderate capital volatility. It achieves this through a combination of US core fixed income, US equity, and alternatives. CPO is passively managed and rebalanced quarterly.

Objective:

CPO aims to deliver a total return that exceeds the Bloomberg U.S. Aggregate Bond Index, with a focus on generating consistent income.

Issuer:

The issuer is Capital Group, a global investment management firm with over 80 years of experience and over $2.6 trillion in assets under management as of 30 September 2023. Capital Group is renowned for its strong research capabilities, long-term investment approach, and experienced management team.

Market Share:

CPO has a market share of approximately 0.5% within the multi-asset income ETF category.

Total Net Assets:

As of 30 November 2023, CPO has total net assets of approximately $4.5 billion.

Moat:

Capital Group's established reputation, strong investment performance, and access to exclusive investment opportunities create a competitive advantage.

Financial Performance:

Since its inception in October 2018, CPO has generated a cumulative total return of around 15%, outperforming the Bloomberg U.S. Aggregate Bond Index.

Benchmark Comparison:

While CPO outperforms the Bloomberg U.S. Aggregate Bond Index, it is important to note that its performance may be impacted by its exposure to equities and alternative assets.

Growth Trajectory:

The multi-asset income ETF market is expected to see continued growth due to its ability to provide diversification and consistent income.

Liquidity:

CPO has an average daily trading volume of over 1 million shares, indicating good liquidity.

Bid-Ask Spread:

The bid-ask spread for CPO is around 0.05%, reflecting a relatively low transaction cost.

Market Dynamics:

Rising interest rates, inflation, and global economic uncertainty can impact the performance of fixed income and equity markets, impacting CPO's returns.

Competitors:

• iShares Core Conservative Allocation ETF (ACVF)
• J.P. Morgan Income Builder ETF (JEPI)
• Invesco Multi-Asset Allocation ETF (IAA)

Expense Ratio:

CPO has an expense ratio of 0.45%, which is relatively low compared to other multi-asset income ETFs.

Investment Approach and Strategy:

CPO invests in a diverse range of assets, including US government bonds, investment-grade corporate bonds, high-yield bonds, US equities, and alternative investments. The ETF's portfolio is categorized into three segments:

• Core Fixed Income (40-60%): Provides stability and income generation.
• US Equity (15-40%): Enhances growth potential.
• Alternatives (0-15%): Diversifies the portfolio and generates uncorrelated returns.

Key Points:

• Seeks to deliver consistent income and capital appreciation.
• Managed by a renowned investment firm with a strong track record.
• Diversified portfolio with a focus on US fixed income, US equities, and alternatives.
• Competitive expense ratio.

Risks:

• Market volatility: CPO's value can fluctuate with market conditions.
• Interest rate risk: Rising interest rates can negatively impact bond prices.
• Equity risk: CPO's equity exposure can lead to losses in declining markets.
• Alternatives risk: Alternative investments can be illiquid and subject to higher volatility.

Who Should Consider Investing:

• Investors seeking a diversified income-generating portfolio with moderate risk.
• Those looking for an alternative to traditional fixed income investments.
• Individuals comfortable with a long-term investment horizon.

Fundamental Rating Based on AI:

8/10

CPO demonstrates a strong fundamental profile with a reputable issuer, experienced management team, and effective investment strategy. The ETF's competitive expense ratio and potential for both income and capital appreciation make it an attractive option for income-oriented investors. However, investors should be aware of the potential risks associated with market volatility and the inclusion of alternative investments.

Resources:

• Capital Group Core Plus Income ETF (CPO) website: https://us.capitalgroup.com/advisor/products/etfs/equity-income/core-plus-income-etf
• Capital Group website: https://www.capitalgroup.com/

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional financial advisor and after conducting thorough due diligence.