CGCP - CGCP: An Aggregate Bond Fund With An Active Management
2024-07-13 05:41:17 ET
Summary
- This article analyzes the Capital Group Core Plus Income ETF, an actively managed bond fund.
- Recent economic data suggests the Fed will likely cut rates in September.
- Compared to passive peers like AGG and BND, CGCP has a higher 30-day yield and lower duration, outperforming its cohort on a 3-year look-back.
- While not as exciting as stocks, bonds provide lower risk and consistent income, making them a valuable portfolio component.
- Overall, CGCP is a compelling option for investors seeking to capitalize on potential rate cuts and add stability to their portfolios.
Thesis
With the Consumer Price Index ('CPI') coming in lower than expected on July 11, 2024, market participants are yet again feverishly talking about rate cuts. We started the year with six cuts priced in, only to see the market move to no cuts or one cut in December, while now reverting course and seeing the Fed lowering in September:
September CME pricing (CME)