T. Rowe Price is reaping the benefits of the surge in actively managed exchange traded funds, according to Tim Coyne, the firm’s head of ETFs. Coyne reports that there is significant growth in this area, with the T. Rowe Price Capital Appreciation Equity ETF (TCAF) and T. Rowe Price U.S. Equity Research ETF (TSPA) being two established strategies that meet investor demand.
“I think having a professionally managed portfolio is really beneficial to clients,” Coyne stated on CNBC’s “ETF Edge” program. “We’re seeing greater volatility and uncertainty across both the equity and fixed income markets.”
The T. Rowe Price Capital Appreciation Equity ETF is designed for investors seeking long-term growth. Coyne explained, “The objective of the fund is to outperform the S&P 500 with lower volatility and greater tax efficiency. It’s also a more concentrated portfolio, typically holding around a hundred names.”
As of April 24, the fund’s top holdings include Microsoft, Amazon, and Apple, along with smaller positions in companies like Becton Dickinson and Roper Technologies. Despite being down about 5% year-to-date, the ETF has seen an 8% increase over the past year, mirroring the performance of the S&P 500.
The T. Rowe Price U.S. Equity Research ETF follows a similar strategy but with a heavier focus on top tech stocks. Coyne described it as a large-cap growth product with elements of both passive and active management, overseen by the firm’s North American directors of research.
Both the T. Rowe Price U.S. Equity Research ETF and the S&P 500 have experienced a 7% decline since the beginning of the year, but the former has seen a nearly 9% increase over the past year, slightly outperforming the S&P 500.
Todd Sohn of Strategas Securities believes that the demand for active managers will remain robust in the current market environment. “This is the type of environment where active management can shine,” Sohn said. “We are in some form of a bear market, and this is where active managers can offer their solutions effectively.”
In conclusion, T. Rowe Price’s actively managed ETFs are proving to be attractive options for investors looking for long-term growth and stability in a volatile market. With a focus on professional management and strategic stock selection, these ETFs are positioned to deliver strong performance in challenging market conditions.
