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A Contrarian Approach to Investing

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Capital Group Dividend Value ETF: A Contrarian Approach to Investing

Portfolio manager Christopher Buchbinder has built a reputation for identifying opportunities overlooked by others, contributing to the success of the Capital Group Dividend Value ETF (CGDV).

Launched in February 2022, CGDV has earned a five-star rating from Morningstar and was named among the top dividend ETFs for 2025. Buchbinder, a contrarian by nature, emphasizes finding value where others see none, though he remains open to popular stocks if the opportunity is compelling.

“My favorite investments are ones where any educated person can pick up the newspaper or read it on their phone and understand why they should not invest in a certain company or industry, but our insight or analysis leads us to the opposite conclusion,” he said.

Fund Performance and Structure

CGDV aims to deliver a yield above the S&P 500’s 1.25%, currently offering a 1.81% yield with a low 0.33% expense ratio.

The fund adheres to strict guidelines: 90% of its holdings are in dividend-paying companies, 90% of which carry investment-grade credit ratings, and 90% are U.S. stocks.

These guardrails steer the fund toward resilient, cash-flowing companies that perform well in weak market environments.

According to Buchbinder, CGDV has outperformed the S&P 500 in nearly every weak market and surpassed the Russell 1000 Value Index in most cases.

While it may lag in roaring growth markets, CGDV achieved strong returns of 29% in 2023 and over 20% in 2024, with a 5.4% gain year-to-date in 2025, ranking in the second and eighth percentiles among peers in 2023 and 2024, respectively.

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Team-Based Approach to Minimize Volatility

Buchbinder, one of five portfolio managers, credits the fund’s success to a collaborative, research-driven approach.

Supported by a deep bench of analysts and macroeconomic specialists, the diverse team ensures consistent results and dampens volatility.

“If you think about investors with a longer holding period — which is really who we would hope would invest in a fund like CGDV — reducing that volatility, helping to make the ride smoother, with a focus on long-term returns is an absolute positive,” Buchbinder said.

This long-term focus helps investors stay committed, enhancing overall returns.

Three Key Investment Opportunities

Health Care Sector

Buchbinder sees significant potential in the health care sector, which has underperformed since the pandemic.

The Health Care Select Sector SPDR Fund is down nearly 4% year-to-date with a five-year annualized return of 7.3%, compared to the S&P 500’s 14.2%.

“When a sector where there are clearly some good companies is out of favor for a multi-year period, I start to get really interested,” Buchbinder noted.

CGDV’s top holdings include Eli Lilly and UnitedHealth, with analysts identifying promising drug pipelines undervalued by the market. Buchbinder remains optimistic about the sector’s three- to five-year outlook.

Aerospace Industry

The aerospace sector is another area of focus, with Buchbinder believing it is in a long-term super cycle. Despite a post-pandemic recovery, airline travel has not fully returned to trend, and supply chain gaps persist.

“The leading plane manufacturers in the world have seven or eight year backlogs that they can’t fill,” he said, citing operational improvements at companies like RTX and GE Aerospace, both top CGDV holdings at over 4% of the portfolio.

Boeing, at 1.42% of assets, is also held, with recent developments signaling a production ramp-up.

Tariff-Induced Tech Opportunities

Buchbinder has capitalized on a recent tech stock sell-off triggered by tariff concerns, drawing parallels to the dotcom bubble from his time as a telecom analyst. While skeptical of AI infrastructure hype, he believes AI will transform lives over the next five to ten years.

The market’s short-term panic created buying opportunities in companies like Microsoft and Broadcom, CGDV’s top holdings at roughly 6% each, alongside Meta Platforms.

“As the market became more panicked, not really because of long term but because of short-term concerns, that created the kind of opportunity that we look for,” he said.

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