Capital Group International Core Equity ETF CGIC

A strong, experienced team runs Capital Group International Core Equity ETF using a disciplined investment approach, earning High People and Above Average Process ratings.

Following Capital Group’s latest periodic internal review, the firm made a few manager changes at the start of 2026, but it’s not cause for concern. Samir Parekh was added to the management team and assumed the role of principal investment officer for subsidiary Capital International Investors, where he oversees capital allocation. Parekh has 19 years at Capital Group and more than 25 years of investment experience, including managing three other international-focused strategies, positioning him well for this role. He replaced veteran Steve Watson as PIO, who remains in the fund. Andrew Suzman heads up the whole fund and his subsidiary’s team of Patrice Collette, Leo Hee, Michael Cohen, Watson, and Barbara Burtin. Parekh oversees CII’s team of Lisa Thompson and Bobby Chada. Eight of the nine named managers have more than 25 years of investment experience each. Supporting them is a deep and talented analyst bench of more than 100 analysts covering a broad range of industries and geographies.

This exchange-traded fund is similar to the American Funds International Growth and Income mutual fund, which serves as the basis for this portfolio. Capital Group’s portfolio strategy management team optimizes the mutual fund into a more compact portfolio based on liquidity factors while ensuring the stylistic traits remain intact. Since the mutual fund’s October 2008 launch, through March 2026, the R6 shares' 8.3% annualized return topped the MSCI ACWI ex USA Index's 6.7% and the foreign large-blend Morningstar Category norm’s 6.3%.

The managers employ a disciplined approach focused on attractively valued foreign large-cap stocks that offer appealing or growing dividends, which fits well with Capital Group’s characteristic multimanager framework. Nine named managers invest through independent sleeves using their preferred styles, which can create modest tilts and differentiated positioning, but the portfolio remains firmly anchored to its growth-and-income mandate. This discipline is reinforced by a sensible yield requirement: Each manager’s sleeve, as well as the overall portfolio, must maintain a yield of at least 20 basis points above that of the index before expenses. This modest hurdle provides flexibility without compromising the strategy’s income focus.

Beyond meeting the yield requirement, managers have wide discretion to pursue their best opportunities, resulting in a well-diversified portfolio of roughly 200 holdings. The income orientation typically leads to above-average portfolio quality metrics, while sector exposures remain broadly in line with the benchmark. This approach proved advantageous in early 2025, as the strategy held up better than both the index and category peers.

With a 0.54% net expense ratio—among the lowest for active foreign large-blend peers—and a tax-efficient ETF structure, this fund is an attractive option.

This ETF employs a similar process as its reference vehicle, American Funds International Growth and Income, and thus earns the same Above Average Process rating for its well-designed, flexible approach.

The managers must build a portfolio with a yield before expenses that's at least 20 basis points higher than the MSCI ACWI ex USA benchmark's and have considerable leeway in how they do so. While they tend to focus on attractively valued foreign large-cap stocks that pay healthy or at least growing dividends, they aren’t confined to the highest yielders and will even invest in nondividend payers. This freedom allows the managers to target the best total return opportunities while still offering above-market income.

Each manager runs a separate sleeve of the overall portfolio, alongside two analyst-run sleeves. Aside from a common yield target, managers are otherwise free to pursue their own investing styles, with the leaders ensuring those styles complement one another. Sector allocations reflect this balanced stock-driven approach, with positioning typically remaining broadly in line with the benchmark. Some managers are also comfortable allocating assets to emerging markets, resulting in exposure that consistently exceeds the category average.

The firm’s portfolio strategy management group constructs this ETF by parsing the reference vehicle into a more compact portfolio based on liquidity factors while ensuring the stylistic traits remain intact.

The strategy's multimanager approach leads to a diversified portfolio. The resulting roughly 200-stock portfolio is more compact than its mutual fund sibling’s roughly 300 stocks, but it largely displays the same features. For instance, like the mutual fund, the ETF had roughly one-fifth of its assets stashed in its top 10 positions as of March 2026. The managers spread assets widely among companies, which helps limit concentration risk.

The strategy's emerging-market positioning is notable. With 23.9% of its assets in companies domiciled in emerging markets (which include South Korea and Taiwan under MSCI classifications), the ETF's stake was much higher than that of the 12.6% foreign large-blend category norm but lower than the MSCI ACWI ex USA benchmark's 31.7%. The managers' China positioning explains much of the discrepancy versus the index. Chinese equities have absorbed 2% to 8% of the mutual fund’s assets over the past five years, versus the index's 7% to 13%. Chinese internet firms Tencent and Alibaba have been large positions in the benchmark, but the managers mostly eschew both names because of their low (or nonexistent) yields.

The managers have also found fewer opportunities in Japan. Over the past decade, the reference vehicle's Japan positioning has ranged between 5% and 12% of assets, less than the index's 13% to 17%.

This ETF shares the same team as its reference vehicle, American Funds International Growth and Income. The firm uses its multimanager approach on this ETF, dividing the assets between subsidiaries Capital International Investors and Capital World Investors, which operate separately. Nine named managers and two research analyst teams run assets here. There may also be undisclosed managers who oversee small slices of the portfolio before the firm names them publicly. The firm uses this practice to develop talent and ease succession concerns. In all, the team’s impressive depth, experience, and skill earn the strategy a High People rating.

After a firmwide self-assessment, this strategy underwent some personnel changes at the start of 2026. Samir Parekh was added to the management team and took over as CII’s principal investment officer, in charge of allocating capital to managers. Parekh has spent 19 years at Capital Group and has more than 25 years of investment experience. He has managed three other international-focused strategies at the firm for several years, so this is well within his wheelhouse. Steve Watson had served as CII’s PIO previously, but moved to the CWI subsidiary and remains on the fund. These moves should have minimal impact.

The remaining manager lineup is solid. Andrew Suzman heads up the whole fund and CWI's team, which includes Patrice Collette, Leo Hee, Michael Cohen, Watson, and Barbara Burtin. Parekh oversees CII’s allocation, which also includes Lisa Thompson and Bobby Chada. Suzman and Parekh help ensure that the managers' investing styles complement one another.

The managers leverage a robust analyst team of more than 100 across subsidiaries for idea generation.

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.

This ETF employs the same team and process as its reference vehicle, American Funds International Growth and Income, and should display a similar performance profile. Since the ETF’s late-June 2024 inception through April 2026, its 21.9% annualized gain bested the MSCI ACWI ex USA benchmark's 21.6%, the foreign large-blend Morningstar Category norm’s 18.8%, and the mutual fund R6 shares’ 21.3%.

The mutual fund’s longer track record serves as a decent guide to performance patterns here.

Since its October 2008 launch, through April 2026, the R6 shares' 8.3% annualized return topped the benchmark's 6.7% and foreign category norm’s 6.3%.

The mutual fund has generally been more resilient than the benchmark during market downturns. In 2011, it declined 7.5%, roughly half the index’s nearly 14% loss. In 2022, it modestly fell a bit less than the index and finished just inside the category’s top half, despite losses tied to a handful of Russia holdings. However, the strategy did lag the index during 2020’s pandemic-driven selloff, when concerns around dividend sustainability weighed on results. More recently, during the early-2025 market pullback driven by tariff uncertainty, the strategy handily outpaced both the index and category norm, with industrials and financials picks such as BAE Systems and Societe Generale outperforming.

The mutual fund’s income orientation and cash position (while modest recently) can cause it to lag in growth-oriented market rallies, though not consistently. It outperformed the index during the strong rally in 2019 and during the pandemic’s market rebound from March 2020 to June 2021. The strategy slightly lagged the index and finished in the bottom half of the category in both 2023 and 2024, two years that favored growth stocks and momentum.

Capital Group International Cor Eq ETF's Prospectus Adjusted Expense Ratio is 0.54% per year. It places it in the second-cheapest quintile of the Morningstar US Fund Foreign Large Blend Category, where the median fee is 0.82% per year. This cost positioning translates into a Medalist Rating Price Score of 1.18, 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.