Launching just a few weeks ago, the quality active ETF TCAF has picked up significant flows in a short amount of time. The T. Rowe Price Capital Appreciation Equity ETF (TCAF) has added $21.2 million to its AUM overall in the last few weeks, according to VettaFi. Most of that arrived via about $20 million in net inflows. Those flows may offer investors and advisors a solid opportunity to take a closer look at the strategy’s approach and prospects.
TCAF arrived in mid-June as one of five distinct, fully transparent active ETFs to join T. Rowe Price’s active roster. TCAF has not only seen more inflows than any of the other new ETFs over the last month but also more than T. Rowe’s other active options, according to VettaFi data.
What might be drawing in those flows? Investors are likely jumping at the opportunity to invest in an active ETF run by David Giroux, six-time nominee and two-time winner of fund manager of the year. His professional reputation as a portfolio manager has led to a large following over the years. So, some investors are eager to own a new ETF strategy with Giroux at the helm.
TCAF’s Active Approach
TCAF takes an active approach to fundamental analysis, evaluating stocks based on some key factors. Among other qualities, those include a high potential for risk-adjusted returns, experienced management, and attractive valuations. TCAF typically holds about 100 mostly large-cap U.S.-based firms. To meet its goal of capital appreciation, Giroux has the flexibility to employ growth, value, or a blended approach as needed. TCAF is also priced very competitively. The fund has an expense ratio of only 0.31%, which puts this fully active portfolio on par with some passive and smart-beta strategies that are often core equity holdings in a portfolio.
That particular combination of active quality investing and an ability to vacillate between growth and value can help right now. Active could be a route into some solid performance, whether facing high or low volatility. Moreover, 2023 has already been a potent year for active investing. Per research from VettaFi, active ETFs have done very well overall regarding inflows. They’ve entered a new era, having previously been second fiddle to the big indexed funds.
For more news, information, and analysis, visit the Active ETF Channel.