Active ETFs have had a strong year in 2023, including the blue chip growth ETF, TCHP. The T. Rowe Price Blue Chip Growth ETF (TCHP) has returned 37.2% YTD, a robust performance nearly doubling its ETF Database Category average, per VettaFi. At the same time, TCHP will reach another AUM milestone in the next month or two if it keeps up its AUM growth momentum. Such a combination of factors invites a fresh look at the strategy and its prospects.
How the Blue Chip Growth ETF Invests
How does TCHP invest? The fund will focus on companies with leading market positions, experienced management, and strong financials. With an active approach as the strategy does, it takes a closer look at individual firms than a passive strategy. Based on a time-tested and popular mutual fund strategy managed by the same PM, the ETF version recently hit its own three-year anniversary in August.
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With the global economy perhaps facing a slowdown in the new year and the U.S. economy itself challenged by rising rates and lingering inflation, a blue chip growth ETF may be able to stand out. By emphasizing the most successful firms with strong positions and dividends, TCHP actively identifies durable firms that can do well despite headwinds.
Right now, its approach has led it to hold the big tech names that have contributed so much to growth this year, like Microsoft (MSFT). Its active flexibility, however, means that if tech takes a hit, the fund adapts more readily than more staid, passive strategies. TCHP is closing in on hitting $400 million in AUM and charging only 57 basis points (bps); it could be an ETF to watch entering 2024.
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