Portfolio manager Christopher Buchbinder often finds opportunities where others see none. That instinct has helped make his Capital Group Dividend Value ETF among the top rated funds on Morningstar. He calls himself a contrarian, but not religiously — and says he is also willing to invest in stocks other people like, if there is an opportunity. “My favorite investments are ones where any educated person can pick up the newspaper or read it on the phone, as we often do today, and understand why they should not invest in a certain company or industry, but our insight or analysis leads us to the opposite conclusion,” Buchbinder said in an interview with CNBC. He is the lead manager on a team of five portfolio professionals for the exchange-traded fund, which launched in February of 2022. The strategy, however, has been around for more than two decades in another structure, he told CNBC. Capital Group Dividend Value ETF (CGDV) is rated five stars by Morningstar, which recently named it among the top dividend ETFs for 2025 . CGDV YTD mountain Capital Group Dividend Value ETF in 2025 The fund aims to generate a yield, before fees, that is above the S & P 500 . The market index currently yields 1.25%, while the ETF has a 1.81% yield and 0.33% expense ratio. About 90% of the fund must be in dividend-paying companies and 90% of the companies in the ETF have to carry an investment grade credit rating. The same percentage is in U.S. stocks. Defensive guardrails “If you think about those guardrails with that, what they effectively do is they steer us towards a profile of a company that tends to have more inherent defensiveness,” said Buchbinder, who has been with Capital Research for nearly 30 years. “Investment-grade companies that pay dividends typically are cash-flowing companies that are going to be more resilient in weak market environments.” The ETF has “pretty much” done better than the S & P 500 in every weak market environment — and better than the Russell 1000 Index of value stocks in the majority of those times, he said. The ETF also participates in up markets, but typically doesn’t keep up in a “roaring growth market,” he added. Still, the fund outperformed both peer ETFs as well as its index benchmark in both 2023 and 2024, according to Morningstar, when it landed in the second and eighth percentile, respectively. CGDV returned nearly 29% in 2023 and more than 20% in 2024 and so far this year is higher by 5.4%. The diverse team of managers have different specialties and take a research-based approach. There is also a deep bench of analysts providing insights and a team that focuses on the macroeconomic environment. The team approach dampens volatility and ensures consistent results, Buchbinder said. The group thinks long-term, so when one manager may be having a bad year, the others may not, he said. “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 for the investors, and helps keep them invested, frankly, which is so important,” he said. Three areas of opportunity Buchbinder sees three areas of opportunity today, including the health care industry. Since the pandemic, the sector has been one of the worst to invest in, he said. The Health Care Select Sector SPDR Fund is down nearly 4% year to date and has a five-year annualized return of 7.3%, according to FactSet. The S & P 500 return is nearly double that, rising 14.2% a year over five years. “That’s what triggers my contrarian interest. 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,” the Brown University graduate said. “Our analysts had identified a number of companies that really have promising drugs, either already launched or in the pipeline, where the market didn’t really seem to be fully reflecting the potential.” While there may be some short-term issues, Buchbinder is confident in the three- to five-year outlook. Two health-care companies, Eli Lilly and UnitedHealth , are among CGDV’s top holdings . The long-time money manager is also bullish on the aerospace industry. While there has been a significant recovery since the pandemic, Buchbinder believes the industry is in a long-term super cycle. RTX and GE Aerospace are two of CGDV’s top holdings, each making up more than 4% of the portfolio. While airline travel has recovered close to trend line, it isn’t fully back and continues to grow, Buchbinder said. Plus, the gaps between plane orders, production and supplying parts that started during the pandemic have not been fully filled, he explained. “We’ve got a big gap in terms of planes being delivered and the leading plane manufacturers in the world have seven or eight year backlogs that they can’t fill,” he said. “Some of those companies have had operational problems, too, that they’re gradually resolving,” he added. “We just think this is an area with a long term tailwind, and there’s improving company-specific prospects.” RTX YTD mountain RTX Boeing , which has suffered from issues surrounding the crashes of two 737 Max planes, is also held in CGDV, making up 1.42% of the fund’s assets. Boeing said Thursday its airplane deliveries to China will resume next month and that it is ramping up production of the 737 Max. Last week, the company reached an agreement with the Justice Department to avoid prosecution for a fraud charge relating to the Max crashes. Lastly, Buchbinder recently found an opportunity in the tariff-induced tech stock sell off. He had long been skeptical of the enthusiasm toward infrastructure needed for the buildout of artificial intelligence, in part because he was a telecom analyst for Capital Group during the dotcom bubble that saw technology, media and telecom stocks fly high and then burst. “I tended to reduce my exposure to companies that are deeply involved in the AI infrastructure build,” he said. “But just like the internet, I do believe that over the next five to 10 years, AI will change all of our lives in really meaningful ways. “So 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 added. Microsoft and Broadcom are the ETF’s top two holdings, both making up about 6% of net assets. Meta Platforms is also among the largest positions.
