While the S&P 500 was down nearly 14% year-to-date as of the end of July, it is rebounding. Stocks on the exchange rose nearly 8% over the course of July.
So, with stocks far cheaper now than they were when the year began, now may be the time for investors to buy back into the market. That’s where active management can help.
In particular, active managers can be useful for investors with a long-term horizon as markets wobble. While investors should pay attention to the daily headlines, they should focus on their long-term goals while letting their active manager deal with the short-term market risk.
“Actively managed ETFs have been using the market volatility to add to take profits or add to favorite positions,” said Todd Rosenbluth, head of research at VettaFi. “While many active strategies have long time horizons, managers can respond to stock price movements that they deem are inconsistent with company fundamentals.”
Analysis by Morningstar shows that active domestic equity managers do their best work during volatile markets. According to the data and analytics company, 62.9% of U.S. equity funds beat their benchmarks through the end of May. For the category, the average excess return was 1.36%.
Within active U.S. funds, large blend, small value, mid-cap blend, and mid-cap value were among the best categories.
Investors continue to pump money into actively managed equity exchange traded funds, particularly domestic equity funds. Citing FactSet data as of June 30, the New York Stock Exchange revealed that active equity ETFs brought in $30.7 billion in investor capital in the year’s first half.
Within equities, investors preferred domestic equity exposure to international and value to growth.
As part of its lineup of active exchange traded funds, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP), the T. Rowe Price Dividend Growth ETF (TDVG), the T. Rowe Price Equity Income ETF (TEQI), the T. Rowe Price Growth Stock ETF (TGRW), and the T. Rowe Price US Equity Research ETF (TSPA).
T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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