Recent years have been very kind to active ETFs. Actively managed ETFs have proliferated and been a key driver of overall ETF launches. Investors have rewarded active ETF demand as well, with active ETFs seeing record flows in January. The T. Rowe Price Growth ETF (TGRT) has been one beneficiary, rising past $1 billion in AUM in recent weeks.
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Active growth ETF TGRT charges a 38 basis point fee to actively invest in U.S. large-cap companies displaying growth characteristics. The fund’s managers lean on fundamental research to measure those characteristics. TGRT applies a bottom-up stock selection approach, looking to metrics like cash flow, sustainable earnings momentum, and earnings rate. What’s more, it also looks to companies capable of growing even amid some headwinds.
The strategy has returned 8.6% over the last year with that approach, beating its ETF Database Category average in that time. The active growth ETF has added $144 million in net inflows over the last month. Over the last year, its AUM has grown more than half a billion according to ETF DB data, thanks to big flows spikes and price appreciation of their underlying stocks.
What role, then, could the fund play for investors this year? Many investors have growth exposures, but an active ETF spin can take it one step further. Especially as uncertainty grows amid domestic equities, active, fundamental, research-driven investing can navigate twists and turns.
For example, questions about interest rates and politicization at the Fed loom. So too does geopolitical uncertainty. Perhaps most important to growth-colored stocks, the fund’s flexibility could help navigate potential AI-related turbulence. With its three-year ETF anniversary on the horizon this June, the fund could be one to watch.
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