With a quarter of 2024 in the books, investors have been closely watching key inflation and interest rate trends.
However, one key trend that could play an even bigger role in the investing landscape may involve the so-called “Magnificent Seven.” While those firms and other big tech names have dominated, a changing landscape could emphasize other sectors. Thanks to its approach, an active ETF like TSPA could take advantage.
See more: Timing Rate Cuts? Look to Active Investing
Recent reporting from the Wall Street Journal underscores that point via the S&P 500 Equal Weight index. The index rose to a record as markets increasingly look willing to seek out opportunities beyond the tech giants. That may owe at least in part to investors anticipating rate cuts from the Fed this year. However, either way, an expanding landscape of opportunities might invite investors to take a new approach.
One strong option may be the T. Rowe Price U.S. Equity Research ETF (TSPA). It actively invests for a 34 basis point fee. TPSA looks to be sector-neutral by weighting each industry close to the S&P 500 and actively chooses the companies to represent those industries through fundamental research rather than relying on the index committee’s annual selections. This forward-looking approach to stock selection provides the opportunity to go beyond the constraints of a passive benchmark index.
That freedom could provide a strong option for investors should the overall tenor of the market change. The active ETF will also hit its three-year milestone this summer. Taking that approach, it has returned 37% over the last one-year period. That return has significantly outpaced its ETF Database Category and FactSet Segment averages. Those averages came in at 20.6% and 17.4% over one year, respectively, per VettaFi data.
Active ETFs continue to see growing demand and could play a significant role in 2024. For investors looking for an agile, flexible way to invest in a changing market this year, active strategies like TSPA could appeal.
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