Why We Upgraded This Active ETF From Capital Group

Higher confidence in Capital Group Growth ETF’s CGGR experienced managers and deep supporting cast led to a People Pillar upgrade to High from Above Average, raising its Morningstar Medalist Rating to Gold from Silver.

Although this exchange-traded fund launched in early 2022, it’s similar to a strategy with a much longer history: Capital Group’s variable-insurance series growth strategy, which dates to the mid-1980s. Seven seasoned managers from the firm’s two research subsidiaries, Capital World Investors and Capital International Investors, oversee distinct portfolio sleeves. Alan Wilson leads the overall strategy and CWI’s team, while Irfan Furniturewala heads CII’s group. Both units lean on roughly 50-person analyst teams, some of whom run portions of the strategy themselves. The multiple, independently run sleeves diversify the portfolio while still allowing the managers to invest with a lot of conviction.

The managers’ styles vary—from traditional growth stocks to fallen angels and cyclical names—but all take a long-term view, which helps keep turnover below average. The strategy is also less concentrated than the Russell 1000 Growth Index, and managers may invest up to 25% of assets overseas.

Key Morningstar Metrics for Capital Group Growth ETF

Morningstar Medalist Rating: Gold

Process Pillar: Above Average

People Pillar: High

Parent Pillar: High

A Disciplined Approach

JPMorgan U.S. Research Enhanced Equity’s JDEUX well-executed and repeatable approach earned a Process Pillar upgrade to Above Average from Average, which boosted its Morningstar Medalist Rating to Silver from Bronze.

The fund combines indexing with quantitative active management. It relies on J.P. Morgan’s analyst research to modestly over- and underweight stocks while keeping regional, sector, and style exposures close to the benchmark. Analysts focus on companies with durable advantages, solid growth prospects, and identifiable catalysts. They use a strategic classification framework and an in-house dividend discount model to assess long-term value and rank stocks within industries. Comanagers Raffaele Zingone and Tim Snyder then use an optimizer to translate those rankings into a tightly constrained portfolio. Turnover ranges between 20% and 40% annually.

Key Morningstar Metrics for JPMorgan U.S. Research Enhanced Equity

Morningstar Medalist Rating: Silver

Process Pillar: Above Average

People Pillar: Above Average

Parent Pillar: Above Average

No Longer a Standout Team

Lower confidence in Fidelity Value Discovery’s FVDKX team resulted in a People Pillar downgrade to Average from Above Average, lowering its Morningstar Medalist Rating to Bronze from Silver.

Sean Gavin has led this strategy for nearly 15 years and brings prior value-investing experience from Delphi Management, Boston Partners, and Pioneer Investments. Intrinsic-value analyst Justin Bennett, quantitative and risk specialist Anastasia Zabolotnikova, and the firm’s broader equity research team support Gavin. Although this strategy has held up well on a risk-adjusted basis versus stock-picking peers, Gavin’s broader record running diversified portfolios is less impressive. From 2014 through 2025, he also managed the more concentrated Fidelity Blue Chip Value FBCVX, which lagged both the large-value Morningstar Category and the Russell 1000 Value Index.

Key Morningstar Metrics for Fidelity Value Discovery

Morningstar Medalist Rating: Bronze

Process Pillar: Above Average

People Pillar: Average

Parent Pillar: Above Average

Persistent Turnover

Instability within Vulcan Value Partners’ VVILX team warranted a People Pillar downgrade to Below Average from Average, dropping its Morningstar Medalist Rating to Negative from Neutral.

C.T. Fitzpatrick has led this strategy since its 2007 inception and remains the central figure on a five-person management team that also includes Stephen Simmons, Colin Casey, Taylor Cline, and David Shelton, with support from three equity analysts. Although the team makes decisions by committee, Fitzpatrick’s roles as firm founder, chair, CIO, and CEO underscore his influence. Beyond Fitzpatrick and Simmons, however, the supporting managers bring less experience than many higher-rated peers. Turnover has also significantly weakened the group. Portfolio manager McGavock Dunbar and analyst Daniel Church departed in 2025. The firm does not plan to replace them, leaving a smaller team amid weak performance and outflows.

Key Morningstar Metrics for Vulcan Value Partners

Morningstar Medalist Rating: Negative

Process Pillar: Below Average

People Pillar: Below Average

Parent Pillar: Average