As economic conditions continue to signal a positive, soft landing in the new year, many investors want to get as much oomph out of technology as possible. Let’s face it: Tech is already heavily represented in many portfolios and the market at large.
That may call for a different approach to tech, with a mix of established and disruptive companies. An active ETF approach to tech therein could adapt more quickly than passive tech funds to potential good news, getting the most out of the new year.
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Will another rate cut arrive this month to kick-start the new year for tech stocks? Chances of a rate cut rose even more following a strong jobs report dropped on Friday. Looking at portfolio strategy, however, the T. Rowe Price Technology ETF (TTEQ) can play a satellite role in addition to a passive tech index fund. Alternatively, it may even replace such an allocation, given how heavily tech-oriented the market-at-large is.
TTEQ targets global large-cap technology and tech-related companies. The active ETF offers heightened exposure to technology stocks capable of transforming key industries. The strategy emphasizes fundamental research, assessing stock valuations and each company’s business prospects. In addition to that allocation to global large-caps, the fund’s active managers also invest in smaller, innovative firms, including some IPOs.
By leaning on the global fundamental research capabilities T. Rowe Price offers, TTEQ’s managers may get the most out of both categories. That combination of frontline, disruptive tech with large-cap firms transforming the industry could make TTEQ a potent option. Charging only 63 basis points, well below many other tech mutual funds and ETFs, the fund has returned 7.5% over the last month, per YCharts data.
While it has just recently launched, the strategy could gather attention in a tech-friendly start to 2025. Yes, valuations are pretty high, but with its fundamental screening and adaptability, TTEQ could appeal as a central holding for technology exposure.
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