This is an actively managed ETF that does not track a specific index. Instead, it seeks out emerging-market companies, as well as multinational companies with a meaningful share of their business in emerging markets, and invests across them in a diversified way. Its core concept is to search a wider geographic range than traditional emerging-market index benchmarks.

It suits long-term investors who want exposure to emerging markets and overlooked global markets through active, research-driven management.

Capital Group launched this actively managed ETF in 2024.

The fund selects stocks through Capital Group's in-house analyst research, targeting companies based in emerging markets and multinational companies with a high share of revenue from emerging markets. Rather than simply including constituents by market-cap weighting, it evaluates each company's growth potential and risks in depth and holds roughly 200 or more securities.

• An expanded geographic strategy that searches overlooked-market companies outside the range of traditional emerging-market indexes
• Research based on Capital Group's proprietary multiple-manager system (The Capital System)

Assets under management (AUM) stand at $3.1B, and the total expense ratio is 0.64% per year.

The fee level is somewhat higher than that of comparable actively managed emerging-market ETFs, but it reflects the cost of in-depth research rather than simple index replication.

Emerging-market equities tend to show large short-term swings depending on dollar strength and the interest rate environment, and country-specific political and economic issues can also affect returns. Active management aims to outperform the benchmark, but short-term return deviations can also occur.

Inflows tend to increase when interest in emerging-market assets rises, and the fund draws relatively more attention when the dollar weakens or when valuation concerns grow in developed-market equities. As an active ETF, it continues to attract steady inflows from institutional and long-term investors.

Its strength is broad research across emerging and overlooked markets, while its weaknesses are the fee burden of active management and uncertainty about performance relative to the benchmark.

Comparable products in the same emerging-market and international equity category shown in the table include EZU (developed Europe), VPL (developed Asia-Pacific), ILF (Latin America), AIA (emerging Asia), and BDYN (dynamic emerging markets). EZU and VPL are passive regional ETFs focused on developed markets, while ILF and AIA are passive products concentrated on emerging markets in specific regions. BDYN is directly comparable to CGNG because it follows an active emerging-market strategy. Since CGNG searches across companies with emerging-market exposure without regional restrictions, it is useful to compare the funds mainly on the breadth of emerging-market diversification and the depth of active research.

Here are the items to review before investing in CGNG. Given the nature of an actively managed structure, it is important to check the fee structure, the way geographic exposure is built, portfolio concentration, and liquidity in advance.

The main risks are the political, currency, and regulatory risks unique to emerging markets, along with uncertainty about the performance of active management. In periods of dollar strength, weaker emerging-market currencies can weigh on returns, and short-term volatility may be higher than for developed-market ETFs.

This is a suitable option for long-term investors who want to diversify across emerging and overlooked markets, backed by Capital Group's research capabilities. Its fee is higher than that of passive emerging-market ETFs, but its differentiators are a wide search range free of index inclusion constraints and the ability to adjust the portfolio actively.