As Global Inflation Ebbs, Try a Global Active ETF | ETF Trends

Inflation and the fight to tame it dominated market narratives throughout 2023. However, with the year drawing to a close, it may be time to look at a different inflation environment. Indeed, as inflation cools globally, central banks worldwide may even start to consider “cuts.” Identifying and taking advantage of those opportunities as they come fits a global active ETF like the TOUS T. Rowe Price International Equity ETF (TOUS), to a T.

With inflation falling even “faster” than expected across advanced economies, hope is rising that the global economy may see relief. While the U.S. has remained resilient to inflation and rising rate challenges, other countries have not done as well. A soft landing, in which inflation is tamed without inducing a recession, may then be on the cards.

See more: “How Active Investing Can Ride End to Fed Hikes”

Still, identifying which countries may lead that upswing calls for a more active investing approach than a simple index fund can offer. A global active ETF, instead, can provide a solid route into that opportunity set. TOUS represents one notable strategy to fit that mold. For example, when comparing central bank action in the E.U. compared to Japan, a global active ETF can identify and invest in the best opportunities.

Global Active ETF TOUS and Its Approach

Charging 50 basis points (bps), TOUS looks for well-priced stocks of any capitalization. It also looks for those set for higher growth. The strategy holds about 150 stocks with quality business models as well as strong valuation metrics. TOUS’ managers also consider local market inputs and macro factors, like monetary conditions, all through bottom-up fundamental analysis.

Together, that approach has helped the strategy return 3.7% over the last month, reaching nearly $68 million in AUM per VettaFi. Having just launched this summer, the global active ETF presents one intriguing option should global inflation continue to cool.

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