Scott Davis and John Finneran of Capital Group - The Most Successful Active ETF Launch in History

Episode • Sep 3, 2024 • 43m

Today, Rusty and Robyn are joined by Scott Davis and John Finneran, the Head of ETFs and ETF Sales Specialist respectively at Capital Group.

Scott T Davis is an ETF director at Capital Group, home of American Funds. He has 17 years of industry experience and has been with Capital Group for 16 years. Prior to his current role, Scott led product development across Capital Group. Earlier in his career he held various strategy and finance roles for Capital Group, Hostess Brands and Boeing. He holds an MBA from University of Southern California and a bachelor's degree in management science from University of California San Diego. Scott is based in Los Angeles.

John Finneran is an ETF sales specialist at Capital Group, home of American Funds. He has 17 years of industry experience and has been with Capital Group for three years. Prior to joining Capital, John worked as an iShares leader at BlackRock/iShares. Before that, he was a sales executive at Vanguard. He holds a bachelor's degree with a double major in marketing and management and a minor in international business from Villanova University. John is based in Harleysville, Pa.

Key Takeaways

[03:16] - Scott’s professional background and what led him to his current position.
[04:40] - John’s past experience and how it all comes together to inform what he does now.
[05:55] - What sets The Capital Group apart from their peers and how has it had such longevity within the industry?
[09:03] - What unique promise does Capital Group see in ETFs as an investment vehicle?
[10:23] - What is the origin story of Active ETFs and their evolution within Capital Group?
[13:40] - Learn about Capital Group's decision to enter the Active ETF space and their approach to their entry.
[15:28] - Top reasons why advisors and investors should consider Actively managed ETFs from Capital Group and what benefits they can expect from them.
[18:07] - How are advisors responding to the Capital Group introducing Active ETFs to client portfolios? What has been some of the feedback and questions that people are asking?
[20:43] - What should investors and advisors be asking when speaking with actively managed ETF managers when they’re doing their own due diligence? Are these questions different from when they talk to active managers of Mutual Funds and SMAs?
[24:42] - How many ETFs does Capital have and what is the total AUM?
[25:37] - Any key takeaways around client demand and what does the road forward look like for Capital Group’s actively managed ETFs?
[30:02] - What are their favorite investment ideas for the remainder of 2024?

Quotes

[11:35] - “I think the industry…haven’t done advisors right. By that I mean, the industry has made it an active vs. passive debate. Every time you’re turning this on, it’s ‘are you beating my ETF…you know, what percentage of active managers are outperforming their index.’ I’m fortunate, you know, I’ve had thousands of conversations with advisors, and it’s actually an ETF vs. Mutual Fund debate. ” ~ John Finneran

[13:40] - “Our decision…back in 2019, and for the many years prior to that, was all about how we could take our investment process and deliver it in the ETF wrapper without compromising any of the benefits or expectations that investors would have in an ETF from Capital. Once the SEC rule was passed, that really gave us the ability to do that…We spend a lot of time and energy in the design and execution of our ETFs to make sure we are leveraging all the tools of the ETF wrapper…in order to manage that…That’s been our guiding light as we’ve developed this suite over the past 26-28 months, we know have 21 ETFs that help satisfy a really broad range of investor need.” ~ Scott Davis

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Disclosure(s) - Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.

Compliance Code: 2240-OPS-9/3/2024

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