Looking to get into the growing move toward active ETFs? You wouldn’t be alone; many investors are moving into the active space. Just this summer, new research projected that active ETFs would hit $4 trillion in AUM by 2030. Of course, not all active ETFs are created equal. Only a select group can meet the lofty expectations investors have for active funds. One strategy that could potentially reach that upper echelon may just be the active ETF TSPA.
See more: Rising Active ETF TSPA Surpasses $700 Million in AUM
TSPA, the T. Rowe Price ETF, launched in 2021. Charging only a 34 basis point fee, the active ETF has outperformed SPY over one year and YTD, per YCharts data. The SPDR S&P 500 ETF Trust (SPY) has returned 16.9% on a total return, YTD basis, and 24.1% over one year on those terms. TSPA, meanwhile, has returned 18% on a daily YTD basis and 27.7% on a one-year average annual returns basis, per T. Rowe Price data.
What stands out most, perhaps, may be the fund’s performance vs. SPY since launch. TSPA has outperformed SPY on a cumulative total return basis by delivering nearly 41% since launching in June 2021 compared to 36.7% for SPY.
TSPA has outperformed SPY on a total return basis since the fund launched, per YCharts data.
The active ETF’s AUM has grown significantly and has now crossed the $800 million mark. It has mostly accrued those assets thanks to investor demand, with the strategy gathering nearly $300 million in net inflows in that time alone.
Active ETF Outlook
So how has the strategy managed to beat SPY in those time frames? TSPA aims to be sector-neutral relative to the S&P 500, making no top-down assertions. Instead, its outperformance is driven by bottom-up, fundamental analysis and stock selection.
Looking forward, the strategy could be poised to benefit from rate cuts. An active ETF can see opportunities other strategies can’t, and with cuts coming, a boost could change the game. For those looking at an active ETF that stands out, TSPA can appeal.
For more news, information, and analysis, visit the Active ETF Channel.
