Markets Are Up – But the Rally May Not Last

Markets closed out the week up, marking the best week for the three major indexes since June. The S&P 500 and Dow Jones Industrial Average rose 4.7% and 4.9%, respectively, while the Nasdaq gained 5.2%, but one investor suspects the market rally may not last.

Investors shouldn’t take this as a sign that markets will display signs of smooth sailing going forward. Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, told CNBC that this too shall pass, and most likely very soon.

“But like every other bounce we’ve had, it hasn’t been very well sustained,” Frederick said. “A bounce today doesn’t necessarily mean it’s going to continue into next week. If it does, I suspect it won’t be more than a day or two.”

So, with markets bouncing wildly in the short- and medium-term, investors may want to employ an actively managed investment strategy. While passive strategies lack the flexibility to adapt to changing market environments, active ETFs can offer the potential to outperform benchmarks and indexes. Plus, active managers with greater resources and greater scope benefit from economies of scale, which can often translate to better returns.

“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.

As part of its lineup of active ETFs, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP), the T. Rowe Price Dividend Growth ETF (TDVG), the T. Rowe Price Equity Income ETF (TEQI), the T. Rowe Price Growth Stock ETF (TGRW), and the T. Rowe Price US Equity Research ETF (TSPA).

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.