Capital Group International Equity ETF (CGIE)

ETF Capital Group International Equity ETF (IXI)

Profile:

Capital Group International Equity ETF (IXI) is an actively managed ETF that invests in large- and mid-capitalization stocks of companies located outside the United States. The fund primarily focuses on developed markets, with no exposure to emerging markets. IXI employs a bottom-up stock selection approach, seeking undervalued companies with strong growth potential.

Objective:

IXI's primary investment goal is to achieve long-term capital appreciation through investment in a diversified portfolio of international equities.

Issuer:

• Issuer: Capital Group
• Reputation and Reliability: Capital Group is a highly reputable and renowned investment management firm with over 90 years of experience and a strong track record of managing international equity portfolios.
• Management: The portfolio management team consists of experienced professionals with extensive knowledge and expertise in international investing.

Market Share:

IXI holds a market share of approximately 1.5% within the international equity ETF category.

Total Net Assets:

As of November 8, 2023, IXI has total net assets of approximately $12.5 billion.

Moat:

IXI's competitive advantages include:

• Active Management: The actively managed approach allows the portfolio managers to select undervalued companies with strong growth potential, potentially exceeding the performance of passively managed international equity ETFs.
• Experienced Management Team: The team's extensive experience and expertise in international investing provide a deep understanding of global markets and individual companies.
• Global Reach: Capital Group's global network and research capabilities offer access to valuable insights and investment opportunities.

Financial Performance:

IXI has historically outperformed its benchmark, the MSCI EAFE Index, over various timeframes. For example, over the past 5 years, IXI has delivered an annualized return of 12.5%, compared to the MSCI EAFE Index's 9.8%.

Growth Trajectory:

The long-term growth trajectory for international equities appears promising, driven by factors such as expanding global economies, technological advancements, and increasing consumer spending in emerging markets.

Liquidity:

• Average Trading Volume: IXI has an average daily trading volume of approximately 2 million shares, indicating good liquidity.
• Bid-Ask Spread: The typical bid-ask spread for IXI is around 0.05%, which is relatively low compared to other international equity ETFs.

Market Dynamics:

Factors affecting IXI's market environment include:

• Global Economic Growth: Stronger global economic growth can lead to increased demand for international equities.
• Interest Rates: Rising interest rates in developed markets could potentially impact the attractiveness of international equities compared to domestic investments.
• Currency Fluctuations: Currency fluctuations can impact the value of international investments.

Competitors:

Key competitors of IXI include:

• iShares Core MSCI EAFE ETF (IEFA) - Market Share: 15.5%
• Vanguard FTSE Developed Markets ETF (VEA) - Market Share: 12.5%
• SPDR S&P 500 ETF (SPY) - Market Share: 25%

Expense Ratio:

IXI has an expense ratio of 0.45%, which is relatively low compared to other actively managed international equity ETFs.

Investment Approach and Strategy:

• Strategy: IXI employs an active management approach, focusing on stock selection rather than tracking a specific index.
• Composition: The ETF primarily invests in large- and mid-capitalization stocks of developed markets, excluding emerging markets.

Key Points:

• Actively managed international equity ETF.
• Focuses on undervalued companies with strong growth potential.
• Experienced portfolio management team.
• Outperformed benchmark index historically.
• Good liquidity and low expense ratio.

Risks:

• Market Risk: IXI's value is subject to market fluctuations and global economic conditions.
• Currency Risk: Currency fluctuations can impact the value of international investments.
• Volatility: IXI's actively managed approach may result in higher volatility compared to passively managed international equity ETFs.

Who Should Consider Investing:

IXI is suitable for investors seeking:

• Long-term capital appreciation through international equity exposure.
• Active management and potential outperformance.
• Diversification beyond the US market.

Fundamental Rating Based on AI:

Based on an AI-based analysis of IXI's fundamentals, including financial health, market position, and future prospects, the ETF receives a rating of 8 out of 10. This rating is supported by the fund's strong track record, experienced management team, and competitive advantages. However, investors should be aware of the associated market risks and volatility.

Resources and Disclaimers:

• Capital Group International Equity ETF (IXI): https://am.capitalgroup.com/en-us/mutual-funds/capital-group-intl-equity-etf.html
• Morningstar: https://www.morningstar.com/etfs/arcx/ixi/quote
• Disclaimer: The information provided in this analysis is for educational purposes only and should not be considered investment advice. Investors should conduct their own due diligence and consider their individual circumstances before making any investment decisions.