Capital Group U.S. Small and Mid Cap ETF

CGMM

Market cap $1.66B

Capital Group U.S. Small and Mid Cap ETF continues to impress, delivering a 20% return since February 2025, outperforming key peers by 3-7%. CGMM's experienced management team leverages the Capital System, emphasizing diverse viewpoints and long-term, low-turnover investing with a forward outlook. Despite a high 0.51% expense ratio, CGMM's risk-adjusted returns (Sharpe and Sortino) lead its peer group, though the sample period is short. I expect CGMM might lag in bear markets.

CGMM is comprised of 90 small/mid-cap securities selected for their capital appreciation potential. Following an "acorns to oaks" strategy, CGMM has already amassed $1B in assets in under a year. My analysis indicates CGMM's portfolio managers target candidates with solid turnaround stories and high forecasted earnings per share growth. The quality is slightly disappointing. The fund currently overweights Financials at 26%, which is defensible due to strong M&A activity, a steepening yield curve, and 33% estimated EPS growth for S&P MidCap 400 Index components.

With under four years as a U.S. ETF provider, Capital Group is about to cross a major milestone. The firm's active ETF lineup had $98 billion in assets as of November 5.