CGMM: Exciting New 'Acorns To Oaks' Small/Mid-Cap ETF
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The Sunday Investor7.04K FollowersFollow5ShareSavePlay(14min)CommentsSummaryCGMM is comprised of 90 small/mid-cap securities selected for their capital appreciation potential. Following an "acorns to oaks" strategy, CGMM has already amassed $1B in assets in under a year.My analysis indicates CGMM's portfolio managers target candidates with solid turnaround stories and high forecasted earnings per share growth. The quality is slightly disappointing.The fund currently overweights Financials at 26%, which is defensible due to strong M&A activity, a steepening yield curve, and 33% estimated EPS growth for S&P MidCap 400 Index components.This article also considers JHMM, AVMC, and FMDE as potential "core" funds with low overlap, and compares CGMM with its selection universe ETFs, represented by SMMD and IWR.Overall, CGMM earns a solid "hold" rating until it becomes more established. Parradee Kietsirikul/iStock via Getty Images Investment Thesis In this article, I initiate coverage of the Capital Group U.S. Small and Mid Cap ETF (CGMM), a relatively new fund with a nearly one-year track record, a 0.51% expense ratio, and $1.08 billion inThis article was written byThe Sunday Investor7.04K FollowersFollowThe Sunday Investor is focused exclusively on U.S. Equity ETFs. He has a strong analytical background, has received a Certificate of Advanced Investment Advice from the Canadian Securities Institute, and has completed all the educational requirements for the Chartered Investment Manager designation.Having covered hundreds of ETFs on Seeking Alpha, The Sunday Investor has developed a complex, proprietary ETF Rankings system which he shares on his website, etf-rankings.com. Nearly 1,000 ETFs receive individual factor scores covering costs, liquidity, risk, size, value, dividends, growth, quality, momentum, and sentiment, which feed into an easy-to-understand composite score from 1-10.
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