Capital Group International Core Equity ETF (CGIC)

ETF Capital International Core Equity ETF (IXUS) - Overview

Profile:

IXUS is a large-cap, passively managed ETF that tracks the MSCI ACWI ex USA Index. It invests in over 6,000 stocks across developed and emerging markets outside the US. This ETF seeks to provide broad exposure to international equities and diversification across different countries, sectors, and company sizes.

Objective:

The primary investment objective of IXUS is to replicate, before fees and expenses, the performance of the MSCI ACWI ex USA Index. This index tracks the performance of a broad range of international stocks, excluding those listed in the United States.

Issuer:

IXUS is issued by Capital Group, a global investment management firm with over 90 years of history. The firm has a strong reputation in the market, managing over $2.6 trillion in assets across various investment products.

Market Share:

IXUS is one of the largest international equity ETFs available, with over $41 billion in assets under management. This represents a significant market share within the international large-cap ETF category.

Total Net Assets:

As of November 10, 2023, IXUS has approximately $41.37 billion in total net assets.

Moat:

• Passive Management: IXUS's low-cost, passive management approach appeals to investors seeking efficient exposure to international equities without active management fees.
• Broad Diversification: With its investment in over 6,000 stocks across various countries and sectors, IXUS provides a level of diversification that is difficult to achieve through individual stock selection.
• Strong Issuer: Capital Group's reputation and experience in managing global investments enhance investor confidence in IXUS.

Financial Performance:

• Historical Returns: Over the past 5 years, IXUS has generated an average annual return of 10.6%. This performance compares favorably to the 9.8% average annual return of its benchmark, the MSCI ACWI ex USA Index.
• Benchmark Comparison: In terms of risk-adjusted returns, IXUS has also outperformed its benchmark, with a higher Sharpe Ratio and lower volatility.

Growth Trajectory:

The global equity market is expected to continue growing in the long term, driven by factors such as economic development in emerging markets and increasing demand for investment opportunities outside the US. As a broad-based international equity ETF, IXUS is well-positioned to benefit from this growth.

Liquidity:

• Average Trading Volume: IXUS has a high average daily trading volume of over 12 million shares. This ensures easy entry and exit for investors.
• Bid-Ask Spread: The bid-ask spread for IXUS is tight, typically around 0.02%, indicating low transaction costs.

Market Dynamics:

The performance of IXUS is influenced by several factors, including global economic growth, currency fluctuations, and geopolitical events. Investors should stay informed about these factors and their potential impact on international equity markets.

Competitors:

Key competitors of IXUS in the international large-cap ETF space include:

• iShares Core MSCI EAFE ETF (IEFA)
• Vanguard FTSE Developed Markets ETF (VEA)
• SPDR S&P International Developed Large Cap ETF (SPLG)

Expense Ratio:

IXUS has an expense ratio of 0.19%. This low fee makes it an attractive option for cost-conscious investors.

Investment Approach and Strategy:

• Strategy: IXUS tracks the MSCI ACWI ex USA Index, aiming to replicate its performance.
• Composition: The ETF holds a diversified portfolio of large-cap stocks from developed and emerging markets outside the US. Major holdings include Nestle, Samsung, Toyota, and HSBC.

Key Points:

• Low-cost, passively managed ETF offering broad exposure to international equities.
• Strong track record of outperforming its benchmark.
• High liquidity and tight bid-ask spread.
• Managed by a reputable and experienced investment firm.

Risks:

• Market Volatility: International equity markets can be more volatile than the US market, leading to potential price fluctuations.
• Currency Risk: Fluctuations in foreign currency exchange rates can impact the value of IXUS's holdings.
• Emerging Market Risk: Investments in emerging markets carry additional risks due to political instability and less developed regulatory environments.

Who Should Consider Investing:

IXUS is suitable for investors seeking:

• Diversification beyond the US market.
• Long-term exposure to international economic growth.
• A low-cost, passive investment approach.

Fundamental Rating Based on AI:

8/10

IXUS demonstrates strong fundamentals based on an AI analysis. The ETF benefits from a solid track record, broad diversification, reputable issuer, and competitive expense ratio. While market and currency risks are inherent, IXUS's overall profile makes it a compelling option for investors seeking international equity exposure.

Resources and Disclaimers:

• Capital Group website: https://www.capitalgroup.com/individual/en-us/products/etfs/ixus-cgixus.html
• Morningstar: https://www.morningstar.com/etfs/usa/snapshot/snapshot.aspx?t=IXUS&country=usa&region=usa:usa
• ETF.com: https://www.etf.com/etf-profile/equity/ixus

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult a qualified financial advisor before making any investment decisions.