Capital Group Core Balanced ETF

CGBL

Market cap $3.41B

Capital Group Core Balanced ETF is an actively managed tactical ETF with variable exposure in equities, bonds, and cash equivalents. Despite below-par equity fundamentals, CGBL has delivered superior risk-adjusted returns versus the Russell 1000, a 60/40 benchmark, and key ETF competitors. With a 0.33% expense ratio and prudent management, CGBL is a compelling option for tactical multi-asset exposure, but investors should note its short track record.

Three years after successfully launching its first ETFs, Capital Group has positioned itself for further growth. The firm announced today the rollout of eight ETF models portfolios.

An actively managed fund hitting its three year track record used to be a major milestone. A Morningstar rating would follow.

CGBL is a balanced equity/bond ETF, currently focusing on equities. CGBL's characteristics and returns are broadly consistent with those of its underlying assets. It yields 1.9%, without significant outperformance. Simpler portfolios seem marginally better than CGBL too.

The Capital Group Core Balanced ETF offers a flexible, actively managed 60/40 portfolio, outperforming the static iShares Core Growth Allocation ETF by 500 bps in the past year. CGBL's equity allocation focuses on quality stocks with lower P/E ratios, avoiding overvalued tech stocks, resulting in a more appealing valuation profile. The bond sleeve emphasizes U.S. Treasuries and AAA MBS securities, providing robust rates-driven performance with an intermediate duration of 6 years and a 4.9% yield.

The Capital Group Core Balanced ETF offers a mix of equities and fixed income, with about 32% in fixed income and 50-70% in equities. CGBL's fixed income assets have moderate interest rate sensitivity, with a 6-year duration and a 5.3% yield to the worst average. The equity portion includes high-quality stocks in defensive sectors like healthcare and consumer staples, with notable holdings in Eli Lilly and UnitedHealth Group.