Capital Group Dividend Value ETF

CGDV

Market cap $22B

There's plenty of incentive to play the long game when it comes to dividend ETFs.

CGDV has ranked among the best performers within the dividend ETF category since its inception three years ago. It's accomplished that, thanks in part to an outsized tech and growth stock exposure. The fact that the fund includes non-dividend payers doesn't make it a pure play compared to others within this group.

The Capital Group Dividend Value ETF may not provide investors with any meaningful income, but its impressive fundamentals and track record can't be ignored. Double-digit three-year historical and one-year estimated sales and earnings growth are key to CGDV's success. Those growth rates rank #1 among 100+ large-cap value ETFs. It's priced relatively high based on its 22.67x forward P/E ratio, but from a GARP perspective, that's a bargain. This article contrasts CGDV's fundamentals with VIG, DGRW, SEIV, and SCHD.

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Vanguard High Dividend Yield Index Fund ETF Shares (VYM) earns a buy rating for dividend investors seeking diversified, low-risk exposure and steady dividend growth. VYM underperforms the S&P 500 and Russell 1000 over 3, 5, and 10 years, but offers appealing returns and risk mitigation via sector diversification. Capital Group Dividend Value ETF (CGDV) outperforms both VYM and the S&P 500, driven by active management and strong tech sector exposure, earning a strong buy rating.

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Fiscal 2025 has been exceptional for CGDV, with total returns outpacing the S&P 500 by 70%. I reiterate my buy rating, expecting the fund's strong uptrend to continue through 2025 and beyond. Since its 2022 launch, CGDV has quickly become a top dividend-focused ETF.

CGDV offers exposure to top AI and tech leaders like MSFT, AVGO, and NVDA, supporting both growth and innovation potential. The fund aims to exceed the S&P 500 yield, invest in dividend payers, and deliver capital appreciation, achieving these goals modestly. While the dividend yield premium over the S&P 500 is minimal, CGDV's price appreciation has notably outperformed over the past three years.

Incepted in June 2024, CGCV is an actively managed ETF pursuing "current income, growth of capital and conservation of principal." CGCV is currently offering a quality-heavy mix of mainly S&P constituents with low beta. IT and industrials are its top sectors. CGCV's performance has been definitely robust, as it has beaten IVV since its inception, plus outmaneuvered most peers from the Large Value sub-class YTD.