I recommend the Capital Group Dividend Value ETF for its resilience during market volatility and potential for long-term outperformance through high-quality dividend stocks. CGDV's strategy includes a focused portfolio of 52 holdings, with significant exposure to industrial, healthcare, and technology sectors, enhancing its total return potential. Despite a low starting dividend yield of 1.5%, the Fund's holdings have strong free cash flows, indicating substantial future dividend growth.

As a seasoned value investor, I emphasize the importance of thoroughly analyzing ETFs, like the Capital Group Dividend Value ETF (CGDV), to ensure they align with your investment style. CGDV offers a weird mix of low P/FCF value stocks and the more popular MAG 7, where valuations seem too optimistic. Past performance of ETFs isn't a reliable indicator; high past returns often lead to future underperformance due to stretched valuations.

CGDV's portfolio, rich in industrials, health care, and tech sectors, is poised for robust earnings growth and market-beating returns in 2025. Despite its high growth stock exposure, CGDV's blend of value and defensive stocks lowers overall risk, making it a solid investment option. CGDV's attractive valuation, low expense ratio, and strong liquidity further enhance its potential for long-term market-beating returns.

On this week's episode of ETF Prime, Kirsten Chang, senior industry analyst at VettaFi, joined Nate Geraci to discuss ETF flow trends in 2025. Afterward, Stone Ridge's Nate Conrad shared details on the firm's suite of LifeX Longevity Income ETFs.

Investor appetite for growth really is something to behold.  Coming into the week of the U.S. presidential inauguration, we had been talking about the importance of diversification in the face of so much uncertainty, geopolitical risk, and lofty equity valuations following massive market gains in recent years.

On Thursday, Capital Group expanded its suite of ETFs with the launch of the Capital Group U.S. Small and Mid Cap ETF (CGMM). For its investors, CGMM seeks to provide capital appreciation over the long term.

Investors are closing the books on another eventful year — marked by record highs for the major stock market indices, record action in Treasury yields and record assets and flows into ETFs. 2024 was also marked by a much-debated pivot from the Federal Reserve, a dramatic Republican sweep in Washington, and plenty of geopolitical turmoil.

CGDV has been the top-performing large-cap value fund since its February 2022 launch, and even after these results, it still offers an attractive combination of growth and value. Its 1.50% dividend yield suggests income is not the focus, and my analysis of its dividend features indicate CGDV's components have the ability to increase dividends but not the willingness. Setting that aside, I believe readers can benefit from CGDV's five-manager approach, as each brings unique skills to the table.

In February, Los Angeles-based investment manager Capital Group will mark three years since it launched its first actively managed transparent ETFs.

Markets have weathered a flurry of catalysts in 2024. These include a surprisingly strong U.S. economy, global election super-cycle, major pivot in rate policy, and continued geopolitical unrest.