As Core Prices Ease, Look to Active Growth Investing

Is inflation finally coming back down to more reasonable levels? A new data drop coming in this week seems to suggest it. Core prices posted their lowest increase since April 2021, per the Wall Street Journal. The Fed’s recent signaling towards higher for longer may have had an effect, but it could still push inflation down even further. Taken together, that change in outlook could boost the case for active growth investing.

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According to recent reporting, the consumer-price index rose 3.4% in April year over year. That news follows a few months of inflation, proving its stubbornness. The turnaround could signal that an eventual return to “normal” inflation may be near. Should inflation actually cool off in good fashion later this year, the Fed could even revisit rate cuts in early 2025.

Active growth investing could, then, be a solid option as inflation really starts to cool. The stock market has continued to do well but could do even better with fewer rate or inflationary challenges. An active growth investing ETF like the T. Rowe Price ETF (TGRT), then, could stand out as we approach the second half of 2024.

TGRT actively invests in firms believed to have strong growth potential. It relies on fundamental research, applying bottom-up considerations to firms. Its managers assess factors like earnings and cash flow as well as the ability to expand even amid complicated economic conditions.

The ETF charges a 38 basis point (bps) fee. It has returned 29.4% since inception, per T. Rowe Price data. Its active status may also boost its appeal to investors looking to add some active layering on top of their core allocations. For investors considering that kind of move, TGRT could benefit from slowing inflation.

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