This is an actively managed international equity ETF that concentrates its investments in companies from developed and emerging markets outside the US that are judged to have high growth potential. It invests across multiple countries but holds a high weighting in a small number of high-conviction stocks, using a non-diversified structure.

It suits medium- to long-term investors who want actively managed exposure to overseas growth stocks outside the US.

It is an ETF run with an active (actively managed) approach by Capital Group.

The fund invests most of its assets in common stocks of non-US companies that the manager judges to have high growth potential. It takes an active strategy that prioritizes selecting individual stocks for growth over country and sector diversification. It invests across multiple countries, but because of its non-diversified structure, the weighting of a small number of holdings can be relatively high.

• Active stock selection rather than passive index tracking
• Non-diversified structure with weight concentrated in high-conviction stocks

Assets under management (AUM) stand at $6.5B, and the expense ratio is 0.54% per year.

Compared with similar international equity ETFs, the active management approach can lead to differences in fee levels and stock concentration.

The fund moves in line with the broader trend in overseas growth stocks. Because it is actively managed, its performance relative to the benchmark tends to be more volatile than that of passive products, and outperformance and underperformance can alternate depending on the market phase.

Fund flows build alongside demand for overseas diversification. Inflows and outflows tend to be affected by periods of dollar strength or weakness and by shifts in risk appetite toward emerging markets, and confidence in the track record of active management, which is specific to active products, also plays a role in inflows.

Its strength is the pursuit of excess returns through active stock selection, while its weakness is the stock concentration risk that comes with a non-diversified structure.

Products shown in the table, such as VEA, IEFA and VXUS, are low-cost alternatives that passively track developed-market or global indexes. Compared with them, this product pursues excess returns through active stock selection, at the cost of somewhat higher fees. VT, which holds a global index including the US and therefore has a different regional composition, and EFA, a long-standing benchmark product focused on developed markets, are also worth considering. If you need other alternatives for active exposure to international equities, it is useful to compare the degree of country and sector diversification as well.

These are the points to review before investing in CGXU. Given the nature of an active international equity ETF, it is necessary to check a broad range of factors in advance, including costs, stock concentration and currency exposure.

Stock concentration from the non-diversified structure and exchange rate fluctuations are the main drivers of short-term volatility. Because the fund is actively managed, there may also be periods when its performance lags the benchmark.

It is a suitable choice for investors who want active exposure to overseas growth stocks outside the US. Investors who want low-cost passive diversification can consider products such as VEA, IEFA and VXUS, and those who want global diversification can consider VT as an alternative.