Weather Stormy Markets With Active Management | ETF Trends

It has been a rough month for stocks and bonds — and that’s even within a year that has not been kind to both. The three major U.S. indexes are set to have their worst performance through September of any year since 2002. The S&P 500 has dropped roughly 23%, while the Dow Jones Industrial Average and Nasdaq Composite have dropped around 18% and 30%, respectively.

Meanwhile, bonds aren’t doing so hot either, having one of their worst selloffs of the past century. According to Dow Jones Market Data, yields on two- and 10-year government bonds are on track to having the biggest yield gains through the first three quarters of a year since 1981.

“What’s alarming is that not much has worked this year, and sentiment out there, in general, is pretty dour. The sharp drop has dealt a blow to the traditional 60-40 portfolio,” wrote Gunjan Banerji at the Wall Street Journal. “And at times, even dishing out money for portfolio protection through the options market has failed to pay out.”

With stock and bond markets continuing to be so consistently volatile, long-term investors may want a seasoned asset manager at the wheel. That’s where active management can help. While passive strategies lack the flexibility to adapt to changing market environments, active ETFs can offer the potential to outperform benchmarks and indexes.

“Active managers have the flexibility to take advantage of market volatility and add to favored positions when prices become more attractive,” said Todd Rosenbluth, head of research at VettaFi.

T. Rowe Price offers a suite of actively managed equity and fixed-income ETFs. T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.

Neil E. Kays, senior product marketing manager at T. Rowe Price, explained that if passive management is like “putting your car on autopilot,” then active management is giving the manager “the ability to grab the wheel.”

“In the current market environment, having an active manager that can pivot is key,” Kays added.

For more news, information, and strategy, visit the Active ETF Channel.