Looking for a way to play potential 2024 rate cuts? Federal Reserve Chair Jerome Powell recently reiterated that the central bank plans to cut rates this year. While multiple cuts would undoubtedly provide a major boost, even one or two in the first half of 2024 could change the market landscape. For investors looking to play those cuts, the active ETF TMSL may offer one of the strongest options.
See more: Timing Rate Cuts? Look to Active Investing
Why the T. Rowe Price Small-Mid Cap ETF (TMSL)? It provides active exposure to small and midcap firms. Those firms could benefit more than their large-cap rivals should rates drop and borrowing become more affordable.
In tech, for example, smaller firms often must borrow quite a bit on future revenue potential. Midcap firms, meanwhile, may have debt costs holding them back from taking a big step forward. Rate cuts could kick-start smaller firms and ease the path toward expansion for midcaps.
How TMSL Can Help
The challenge, then, comes from finding the right firms in those spaces. That’s why an active ETF can help. Well-resourced active managers have the potential for a big information advantage with smaller company research. Through deeper research, they have the potential to find undiscovered gems.
TMSL stands out for its ability to leverage the full T. Rowe Price capabilities as one of the industry’s leading small- and mid-cap management firms. It charges 55 basis points for that approach, which is competitive in the active small/mid-cap space. The Fund applies growth or value style as needed. The strategy considers individual stocks based on profitability, stability, earnings quality, and more.
Additionally, TMSL has returned 13.9% over the last three months, outperforming both its ETF Database Category and FactSet Segment averages. The fund has also added more than $50 million in flows over the last six months, per VettaFi data. For those looking to invest in rate-cut-sensitive stocks as a route into rate cuts in 2024, TMSL stands out as a strong option to watch.
For more news, information, and strategy, visit the Active ETF Channel.
