Passive, index-based ETFs help investors track the markets, but they lack the ability to adjust their holdings based on changing market environments. How do you balance the need for core equity exposure without being left to the whim of the market?
In the upcoming webcast, Strong Earnings, Strong Markets – Why Now’s the Time for Active Management, Ken Uematsu, Associate Portfolio Manager, T. Rowe Price, will discuss how active management can beat passive (without taking on unnecessary risk).
T. Rowe Price offers four actively managed ETF strategies, including the T. Rowe Price Blue Chip Growth ETF (TCHP), T. Rowe Price Dividend Growth ETF (TDVG), T. Rowe Price Equity Income ETF (TEQI), T. Rowe Price Growth Stock ETF (TGRW) and the recently launched T. Rowe Price U.S. Equity Research ETF (TSPA).
The T. Rowe Price Blue Chip Growth ETF seeks to provide long-term capital growth by investing in common stocks of large and medium-sized blue-chip companies with the potential for above-average earnings growth.
The T. Rowe Price Dividend Growth ETF seeks dividend income and long-term capital growth by investing most of its assets in the common stocks of dividend-paying companies expected to increase their dividends over time.
The T. Rowe Price Equity Income ETF seeks a high level of dividend income and long-term capital growth by investing most of its assets in common stocks, emphasizing large-capitalization stocks that have a strong track record of paying dividends or that are believed to be undervalued.
Lastly, the T. Rowe Price Growth Stock ETF seeks long-term capital growth and invests in companies that have one or more of the following: superior growth in earnings and cash flow, the ability to sustain earnings momentum even during economic slowdowns, occupation of a lucrative niche in the economy, and the ability to expand even during times of slow economic growth.
Constructed similarly to flagship investment strategies that have served T. Rowe Price clients well for decades, the active ETFs use the same portfolio managers as their corresponding mutual funds and employ the firm’s long-standing strategic investing approach, characterized by rigorous research, risk awareness, and independent decision making.
T. Rowe Price active ETFs complement the firm’s traditional mutual fund offerings and deliver the key features associated with existing ETFs that some investors may prefer, including continuous daily trading, real-time market-determined pricing, and tax efficiency. Over time, T. Rowe Price plans to deliver a robust ETF product lineup covering investments in various asset classes.
T. Rowe Price U.S. Equity Research ETF’s strategy maintains the style and sector exposures similar to the S&P 500, but it uses an active approach to select its stocks, seeking to add value from the “best ideas” input of T. Rowe Price’s equity research analysts. The U.S. Equity Research ETF is similar to the corresponding T. Rowe Price’s U.S. Equity Research Fund (PRCOX), with which it shares the same experienced portfolio management team comprising the firm’s directors of equity research for North America.
The T. Rowe Price active ETFs also feature a proprietary portfolio disclosure process that ensures market makers have enough information to quote prices with a high degree of confidence while simultaneously protecting the intellectual property of the firm’s investment professionals and the interests of its mutual fund shareholders. The proprietary non-transparent actively managed ETF wrapper may also attract more money managers into the ETF space, providing active managers with a way to capture the benefits of the ETF investment structure while protecting their secret sauce from potential frontrunners.
Financial advisors who are interested in learning more about an active approach to investing can register for the Thursday, September 16 webcast here.