3 of My Favorite Active ETFs

Russel Kinnel: What are my favorite actively managed ETFs? Let’s jump in.

3 of My Favorite Active ETFs

1. T. Rowe Price Capital Appreciation Equity TCAF
2. Harbor International Compounders OSEA
3. Capital Group Municipal Income CGMU

I own T. Rowe Price Capital Appreciation Equity TCAF because David Giroux is one of the best flexible-equity investors out there. He’s moved around the style box in search of the most compelling stocks regardless of where they land in the style box. And he’s done a remarkably good job of stock-picking. This Gold-rated fund charges just 31 basis points.

I also like Silver-rated Harbor International Compounders OSEA. The $500 million fund runs a focused portfolio of 30 foreign growth stocks with big compounding potential. Subadvisor C WorldWide has a solid team picking stable growers and high-conviction names. Any new additions in the portfolio have to be met with equal sales so that there’s a strict sell discipline on the best names. Because it’s a 30-stock portfolio, it can be a little unpredictable, so probably not a core holding for most investors, but it is a promising one.

Capital Group Municipal Income CGMU is a fund on my watchlist. It’s a well-run muni fund at a low price of just 27 basis points. It stands out for its seasoned management team and well-articulated research-heavy investment strategy. It earns a High People and Above Average Process rating.

Strong security selection and good risk management have helped to build a solid record at the fund since it was launched in 2022. Three seasoned managers guide the fund: Mark Marinella, Courtney Wolf, and Jerome Solomon. The fund mixes investment-grade and a slug of lower-quality bonds to produce a nice yield without too much volatility.

So far, the fund’s returns have been outstanding. I think it’s well positioned to fare well in the future.

Watch ‘One of the All-Time Great Investors’: How Fidelity’s Will Danoff Proved Active Management Can Still Succeed for more from Russel Kinnel.