Why We Highly Rate Capital Group Dividend Value ETF

Key Morningstar Metrics for Capital Group Dividend Value ETF

• Morningstar Medalist Rating: Gold
• Process Pillar: Above Average
• People Pillar: High
• Parent Pillar: High

Increased conviction in Capital Group Dividend Value ETF’s CGDV veteran leaders merits a People rating upgrade to High from Above Average.

This active exchange-traded fund has some of the same characteristics as Capital Group’s long-standing mutual funds (branded as American Funds), in that it shares the firm’s characteristic multimanager approach and is in the hands of veteran investors. Five named managers run individual sleeves here—all but one with at least 24 years of experience at the firm—and each has the latitude to pursue their best ideas. Christopher Buchbinder leads the fund and has more than 29 years of investment experience, serving as a manager on this fund’s composite since 2007. While veteran James Terrile stepped off in March 2025, the firm named Brittain Ezzes, who has more than 25 years of industry experience, to the management team in his place.

With an eye toward quality, income drives this fund’s guidelines. In aiming for a dividend yield before fees that is 30% greater than the S&P 500, the fund mostly sticks to US investment-grade companies with a long history of paying dividends. In fact, the majority of firms have paid dividends in each of the past 10 years. This includes the top 10 holdings: Broadcom AVGO, RTX Corporation RTX, and Microsoft MSFT. However, the managers do have the flexibility to focus on a company’s growth rate and can allocate a small portion of the fund’s assets to nondividend payers that typically have strong balance sheets, such as Alphabet GOOG.

While this fund’s hybrid focus can leave it out of step with a pure large-value play, it has paid off over the long term. This fund tracks the firm’s Capital Group Dividend Value composite, which goes back to 2001. Since Christopher Buchbinder joined in October 2007 through August 2025, its 10.2% annualized gross gain bested the Russell 1000 Value Index’s 7.5% and outperformed the large-value Morningstar Category norm’s 7.1%, but it lagged its S&P 500 prospectus benchmark by 29 basis points. The emphasis on dividend-paying, higher-quality large-cap firms has typically led to resilient performance in down markets versus either benchmark, though when growth stocks vastly outperform, it tends to lag the S&P 500 but beat the Russell 1000 Value.

Its 0.33% net expense ratio places it among the category’s cheapest actively managed funds, and its structure is more tax-advantaged than a mutual fund, making it a topnotch option.

Capital Group Dividend Value ETF: Performance Highlights

While this ETF was only launched in February 2022, through August 2025, its 17.2% annualized gain has handily outpaced the Russell 1000 Value Index’s 8.8%. However, this fund’s track record dates back much further to 2001 under the Capital Group Dividend Value composite label. Since Christopher Buchbinder joined the fund in October 2007 through August 2025, its 10.2% annualized gross gain bested the Russell 1000 Value Index’s 7.5% and outperformed the large-value category norm’s 7.1%, but it lagged its S&P 500 prospectus benchmark by 29 basis points. It has bounced around being more correlated to the S&P 500 and Russell 1000 Value Index at times.

While the fund has typically been roughly as volatile as the S&P 500 and Russell 1000 Value Index, the emphasis on dividend-paying large firms has given it resilience in some down markets. That buoyed the fund relative to at least one of the indexes in 2018’s brief fourth-quarter pullback and 2020’s coronavirus-driven bear market. In 2022, its 8.5% loss was less than the S&P 500’s 18.1% decline, but it lagged the Russell 1000 Value Index by 93 basis points, in part due to its technology weighting (underweight versus the S&P 500, overweight relative to the Russell 1000 Value). In 2025’s first-quarter pullback, the fund held up better than the S&P 500 but slightly lagged the Russell 1000 Value.

In market rallies (particularly those driven by growth stocks), the fund tends to outperform the value index but doesn’t typically best the broad market. For example, in 2023 and 2024, it outpaced the Russell 1000 Value and landed in the top quintile of peers both years but only beat the S&P 500 in 2023.