The T. Rowe Price U.S. Equity Research ETF (TSPA) has crossed $1 billion in AUM this week, marking an important milestone for the fund. In a year in which active equity ETFs have stood out, the leading active ETF has played a big part. Among low-fee active equity ETFs with at least three years of track record and half a billion in AUM, TSPA places among the top five performers based on ETF Database data.
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How has the fund achieved that AUM milestone? The fund charges only a 34 basis point (bps) fee and met its three-year ETF milestone this June. Per its prospectus, the strategy takes a bottom-up approach to portfolio construction, leaning on T. Rowe Price’s fundamental research capabilities. It aims to create a portfolio with similar characteristics to the S&P 500 Index.
That approach has helped its performance over the last year. At the same time, it’s also contributed to its AUM gathering. The leading active ETF has pulled in $854 million in net inflows over the last one-year period, per ETF Database data. That far outpaces AUM growth via price influence, suggesting that the fund’s growth is owed to convincing new investors. Outperforming the S&P 500 benchmark since its inception has certainly helped to further raise the awareness of T. Rowe Price’s active approach to TSPA.
Looking forward, it could be poised for yet more AUM growth and performance momentum. Over the last month, for example, the strategy has outperformed its ETF Database Category and FactSet Segment averages. With rate cuts in the rearview and a soft landing potentially looming, a leading active ETF like TSPA could offer a particular appeal. By leaning on fundamental research to closely scrutinize companies, it can differentiate itself from passive large-cap funds with limited flexibility.
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