Capital Group Core Equity ETF CGUS

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Morningstar’s Analysis CGUS

Medalist rating as of .

A flexible approach and low fees help this strategy stand out.

Our research team assigns Silver ratings to strategies that they have a high conviction will outperform their Morningstar Category average over a market cycle on a risk-adjusted basis.

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A flexible approach and low fees help this strategy stand out.

Senior Analyst Stephen Welch

Stephen Welch

Senior Analyst

Summary

Capital Group Core ETF is undergoing more personnel changes, but it remains in adequately experienced hands.

After a firmwide self-assessment, this strategy is undergoing some personnel changes. Two managers, Keiko McKibben and Blair Frank, are retiring. McKibben will step off the strategy and retire on Jan. 1, 2026, while Frank will come off on May 1, 2026, and retire in July. While they are the two longest-tenured managers here, Charles Ellwein and Caroline Jones remain. The firm also disclosed three managers, Jessica Spaly, Martin Jacobs, and Brad Barrett on Dec. 1, 2025, to help ease the transition. Spaly and Jacobs have managed a similar strategy for several years, which helps. In January, veteran Cheryl Frank, another tenured manager on other strategies, will join the team. During the six-month stretch from December 2025 to May 2026, roughly 35% of assets will change hands. While the firm has made sensible additions, they need some time to get settled.

The large-blend strategy benefits from a flexible growth and income approach. The fund seeks a healthy mix of dividend-payers and growth companies, creating a diversified portfolio across sectors and industries. The managers pool the eligibility lists of three dividend-oriented and core, large-cap strategies the firm runs to give them a broad universe of stocks to choose from. Additionally, up to 15% of assets can be invested outside the US.

Lineup balance is important to ensure success in executing this strategy’s mandate and not lean too far to either dividend-payers or growth stocks. Spaly took over McKibben’s role as the lead principal investment officer, which puts her in charge of capital allocation and ensures the overall strategy adheres to its mandate. No one on the roster skews too far from core, which should reduce the importance of allocation decisions and still result in a balanced and diversified portfolio.

With an eye toward quality, this fund should hold up better in times of distress. Although the exchange-traded fund isn’t that old, having launched in early 2022, it follows a strategy used by a variable insurance series since the mid-1980s. That offering’s 16.3% loss in 2022, for example, still beat the S&P 500’s 18.1% drop, in part thanks to a lighter technology stake and industrials picks such as Northrop Grumman helping buoy the fund. In early 2025’s pullback, it lost less than the index and landed in the large-blend Morningstar Category’s top third.

This strategy’s 0.33% net expense ratio places it among the category’s cheapest actively managed funds, which gives it a leg up on the competition.

Rated on Published on

Senior Analyst Stephen Welch

Stephen Welch

Senior Analyst

Process

Above Average

This strategy employs a flexible growth-and-income approach and warrants an Above Average Process Pillar rating.

This strategy’s flexible approach to large blend makes it distinct. It seeks a healthy mix of dividend-payers and growth names, creating a diversified portfolio across sectors and industries. The managers pool the eligibility lists of three dividend-oriented and core large-cap strategies the firm runs to give them a broad universe of stocks to choose from. The managers can differentiate the strategy by investing up to 15% of assets overseas. These foreign holdings tend to be competitively advantaged global firms.

The approach has all the hallmarks of American Funds' multiple-manager system. Dividing the portfolio into separately run sleeves allows managers to stick with their highest-conviction picks, while the combination of sleeves mutes volatility. Managers' ability to hold cash when compelling investment opportunities are scarce provides another volatility check.

Like other Capital Group strategies, the managers here are long-term-oriented. Annual portfolio turnover in a related insurance-series vehicle has ranged from 19% to 45% during the past 10 years.

With a management transition here, the new managers need to prove they can execute the approach. But their previous managerial experience, mostly on similar strategies, instills confidence that this crew is up to the task. Additionally, no one on the roster skews too far from core, which should help lead to a balanced portfolio.

This fund tracks the firm’s variable insurance series, American Funds IS Growth-Income, which dates back to the mid-1980s. While company-level research has the biggest impact on the portfolio’s positioning, the managers still must keep in mind the strategy’s income objective, roughly a yield in line with the S&P 500, when building positions. As of October 2025, the top 20 holdings, Amazon.com and Vertex Pharmaceuticals, didn’t pay a dividend and required managers who owned them to balance out their portfolio sleeves with stakes in higher-yielding stocks. While some of these are tech firms like Broadcom, a good portion came from dividend havens, such as tobacco, where the strategy has had a 1- to 2-percentage-point industry overweighting recently. British American Tobacco and Philip Morris International are both in the portfolio.

Sector weightings are mostly in line with the index, but there are some areas of differentiation. For example, the strategy has long had a 5- to 9-percentage-point underweighting to technology relative to the index, as many of those companies don’t pay a dividend, but that gap has closed recently and was down to roughly 2 percentage points as of October 2025. The fund has a healthy stake in industrials, and as of October, its 15.2% allocation was 7 percentage points overweight the index with picks RTX Corp and Automatic Data Processing in the top 20 holdings.

The managers have typically stashed about 10% of assets overseas in large multinationals like airplane manufacturer Airbus.

Rated on Published on

Senior Analyst Stephen Welch

Stephen Welch

Senior Analyst

People

Average

This strategy is undergoing more lineup changes, but the new team is still an experienced crew. They’ll need some seasoning, and thus, it warrants an Average People Pillar rating.

After a firmwide self-assessment, this strategy is undergoing some personnel changes. Two managers, Keiko McKibben and Blair Frank, are retiring. McKibben will step off the strategy and retire on Jan. 1, 2026, while Frank will come off on May 1, 2026, and retire in July. The firm disclosed three managers, Jessica Spaly, Martin Jacobs, and Brad Barrett, on Dec. 1, 2025, to help ease the transition. All three have been running money in an undisclosed role on the strategy for about a year. Additionally, veteran Cheryl Frank will join the team in January. During the six-month stretch from December 2025 to May 2026, roughly 35% of assets will change hands. This significant change comes on the heels of roughly 40% of assets changing hands last year.

Still, the new management roster is an experienced crew, but it will need some time to get settled here. Both Spaly and Jacobs have managed a similar strategy, American Funds Investment Company of America, for several years, which eases the transition here. Spaly also took over McKibben’s role as the lead principal investment officer, which puts her in charge of capital allocation, ensuring the overall strategy adheres to its mandate, and serving as a key client-facing representative. Her experience managing ICA makes her a reasonable choice here. Barrett is new to running money in a disclosed role but has been managing money in an undisclosed role on a similar strategy for a few years. Cheryl Frank will join in January and has managed value- and growth-oriented strategies for several years at the firm, so she’s a capable hand. Both Charles Ellwein and Caroline Jones remain, providing some continuity. Additionally, the managers draw on about 50 analysts, some of whom oversee picks in the analyst sleeve of the portfolio.

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Senior Analyst Stephen Welch

Stephen Welch

Senior Analyst

Parent

High

Capital Group stands out from the pack as it enhances capabilities around strong core competencies. It earns a High Parent rating.

Since 1931, Capital Group, parent of American Funds, has thoughtfully built out capabilities to become one of the world’s largest asset managers, managing more than USD 3 trillion dollars. Building on the success of its long-term-oriented, multiple-manager system for global equities, the firm has developed robust fixed-income and multi-asset units, each managing more than USD 500 billion. In January 2026, as part of its periodic review of its now five distinct research organizations, Capital Group implemented changes to its equity investment subsidiaries. This exercise resulted in most equity strategies having at least one portfolio manager change, but according to the firm, it better balances each of Capital Group’s three equity groups in terms of investment breadth and helps the firm better align leadership opportunities across the groups. These kinds of shifts have occurred before, with the last coming in 2018.

Capital Group has also turned its attention to some modern opportunities. To address public/private market convergence trends, it launched in April 2025 two semiliquid funds with private market giant KKR. In keeping with its signature portfolio management approach, it splits those funds into multiple sleeves, which are managed independently by distinct managers at each firm. Capital Group plans to deepen this relationship with target-date and model portfolios, as well as public/private equity funds. On the other end of the spectrum, although the firm is firmly dedicated to active management, it has also acknowledged investor preference for passive investing and has thus partnered with indexing stalwarts Vanguard, BlackRock, and Schwab on active/passive models. Capital Group’s proven investment prowess, strong reputation among investors, and scale mean it can be selective with its partnerships.

In addressing another recent trend, since early 2022, the firm has launched more than 25 active exchange-traded funds globally, most of which are distinct, but several are similar to some of its legacy American Funds mutual funds. Unlike some of its peers, though, it has not filed for SEC exemptive relief to offer ETFs as a share class.

That’s a lot of change for such a storied and sizable firm, but Capital Group has a long history of serving investors well.

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Senior Analyst Stephen Welch

Stephen Welch

Senior Analyst

Performance

While this ETF was only launched in February 2022, its returns through November 2025 handily outpaced its S&P 500 benchmark and the large-blend category peer norm. The ETF shares its strategy with a variable insurance series, which has a much longer record dating to the mid-1980s. Since manager Blair Frank joined that product in mid-2006 through November 2025, its 10.4% annualized gross gain bested the large-blend norm’s 9.0% but lagged the S&P 500 and Russell 1000 category index by narrow margins. It has had lower volatility than all comparisons, though, so its risk-adjusted results are competitive.

This strategy’s focus on more established and higher-quality fare has given it some resilience in down markets. For example, in 2022’s market pullback, the strategy’s 16.3% loss was less than the S&P’s 18.1% loss and landed in the top 40.0% of the category. A lighter technology stake than the S&P and good industrials picks, such as Northrop Grumman, helped buoy the fund. In early 2025’s pullback, the strategy lost less than the S&P and category norm, thanks in part to a lighter technology stake and decent industrials picks like RTX Corp and GE Aerospace.

The fund’s income orientation can pose as a headwind as it did in 2019 and 2021, but overall, the strategy’s flexible growth and income approach means that it is not always the case. As growth rebounded in 2023 and 2024, the strategy posted competitive results, landing in the top third of the category both years.

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Senior Analyst Stephen Welch

Stephen Welch

Senior Analyst

Price

1.39

Capital Group Core Equity ETF's Prospectus Adjusted Expense Ratio is 0.33% per year. It places it in the second-cheapest quintile of the Morningstar US Fund Large Blend Category, where the median fee is 0.67% per year. This cost positioning translates into a Medalist Rating Price Score of 1.39, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.

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Portfolio Holdings CGUS

  • Current Portfolio Date
  • Equity Holdings —
  • Bond Holdings —
  • Other Holdings —
  • % Assets in Top 10 Holdings 43.6
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

NVIDIA Corp

7.77 927M
Technology

Microsoft Corp

7.03 839M
Technology

Broadcom Inc

5.24 625M
Technology

Amazon.com Inc

4.74 565M
Consumer Cyclical

Meta Platforms Inc Class A

4.56 544M
Communication Services

Eli Lilly and Co

3.75 448M
Healthcare

Alphabet Inc Class A

3.17 378M
Communication Services

Taiwan Semiconductor Manufacturing Co Ltd ADR

2.76 329M
Technology

Apple Inc

2.54 303M
Technology

Applied Materials Inc

1.98 237M
Technology

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