By the standards of the exchange traded funds industry, Capital Group was a late arrival. The Los Angeles-based asset manager known for its American Funds lineup of actively managed mutual funds didn’t roll out its first ETFs until early 2022.
As has been the case with other active managers steeped in mutual fund heritage, Capital Group hasn’t been punished for being tardy to the ETF party. Rather, it’s been able to leverage brand awareness and trust among advisors and the playbook of introducing ETFs with ties to established mutual funds to generate ETF success. So much so that Capital Group is now the eleventh-largest U.S. ETF issuer.
One of the more impressive stories in the issuer’s still young ETF suite is the Capital Group Dividend Value ETF (CGDV) – an active fund with $22.8 billion in assets under management. Put simply, CGDV aims to generate a dividend yield in excess of the S&P 500 with an emphasis on domestic large-cap companies, though 18.3% of its holdings are classified as mid-caps.
CGDV is a prime example of an ETF where advisors should not judge a book by its cover. Or in this case, don’t judge an ETF by its title. Let’s examine why that’s the case.
CGDV Details Matter
When the words “dividend” and “value” are combined in a fund title, particularly if it’s a high dividend strategy, it’s reasonable for investors to expect the end product to be chock full of defensive and value sectors known for above-average payouts and lengthy track records of dividend growth. Think consumer staples, healthcare and utilities.
That’s not the case with CGDV. Proving the technology sector offers an attractive, viable dividend proposition, that group accounts for 24.5% of the ETF’s weight. It’s top 10 holdings include Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO) and Meta Platforms (NASDAQ: META). Nvidia and Facebook parent Meta aren’t much to write home about and the latter is a new dividend payer.
Those two holdings speak to the flexibility of active management and it’s possible one or both will become impressive dividend growers with the time as both companies have the cash to do so. Still, the bulk of the CGDV portfolio is comprised of established dividend growers.
“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,” observes Stephen Welch of Morningstar. “In fact, the majority of firms have paid dividends in each of the past 10 years.”
CGDV Has the Goods
In ETF parlance, CGDV isn’t old per se, but it’s related to the Capital Group Dividend Value Fund, which is about 25 years old. As is the case with some of the other active ETFs that came to market over the past few years courtesy of mutual fund sponsors, CGDV’s DNA is worth considering. In this case, the Capital Group Dividend Value Fund handily outpaced the Russell 1000 Value Index over the past 18 years.
CGDV’s track record is considerably shorter, but helped in part by an annual fee of 0.33%, favorable among active dividend ETFs, the Capital Group ETF is off to an impressive start.
“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,” adds Welch.