As active ETFs continue to leap forward among investing strategies, certain funds will start to stand out. Active ETFs helped drive record ETF launches last year and are on track to push that record launch pace this year, too. One other way to measure the growing impact of active ETFs and the role they can play is to examine how those new active ETFs are doing. One active growth ETF, TGRT, could appeal to investors and recently wrapped its first year of operation.
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TGRT, the T. Rowe Price Growth ETF, launched in June 2023. With a year under its belt, the active growth of ETF has risen above $300 million in AUM. Compared to other strategies, it has done so almost entirely thanks to organic investor demand and inflows.
That momentum has coincided with notable performance. TGRT has returned 37.6% since inception, outperforming its benchmark of 34.1%, per T. Rowe Price data. Not only has its performance helped the strategy relative to its benchmark, but it has also outperformed other ETFs in its category. Per VettaFi data, the active growth ETF has outperformed its ETF Database Category and Factset Segment averages.
Leaning Into Fundamentals
Charging only 38 basis points (bps), the strategy looks at large-cap stocks with growth characteristics. It leans into fundamental research from T. Rowe Price’s analysts and researchers to take a bottom-up approach to stock selection. Specifically, the active growth ETF looks at sustainable earnings momentum, cash flow, and the ability to expand during downturns.
So, while it has leaned heavily into those same firms that have lifted the overall stock market, it retains flexibility from its active approach to hold other companies and pivot with market changes. It could appeal to investors as an ETF to find the next big names to boost portfolios entering its second year.
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