Capital Group files for new multi-asset ETFs, looks to meet investors’ desire for income

Capital Group has filed for two new multi-asset Exchange-Traded Funds focused on income and capital growth, which it says will help advisors meet clients' income needs.

The Capital Group Multi-Asset Income ETF’s investment objective is to provide current income while secondarily striving for capital growth, according to an SEC filing.

The company has also filed for the Capital Group Multi-Asset Income Builder ETF, which seeks to provide a level of current income that exceeds the average yield on U.S. stocks generally and to provide a growing stream of income over the years, according to an SEC filing. The fund’s secondary objective is to provide growth of capital.

Capital Group told InvestmentNews that the ETFs are expected to launch late this year subject to regulatory timelines.

“Financial advisors have consistently told us they want actively managed ETFs to help meet their clients’ income needs,” said Scott Davis, head of ETFs at Capital Group, in a statement. “To meet that demand, we are leveraging Capital Group’s long history of combining equities and fixed income securities to meet income objectives and bring that capability into the ETF structure.”

“Historically, investors seeking multi-asset ETFs have been relatively underserved with limited options,” he added, noting that Capital Group has been encouraged by strong demand for its Captal Group Core Balanced ETF (Ticker: CGBL). This, Davis said, has quickly grown to become the largest moderate allocation ETF by AUM.

Capital Group describes itself as world’s largest active manager of ETFs, when excluding companies that have converted mutual funds into ETFs. The asset management and recordkeeping giant has approaching $150 billion of ETF-based assets under management.

At the Exchange ETF conference in Las Vegas earlier this year Capital Group told InvestmentNews that the asset class can significantly boost advisor efficiency.

Research released last year by Capital Group also found that active ETFs could serve as a client acquisition magnet for advisors looking to attract Gen X, millennial, and Gen Z clients.