2023’s market narrative has passed the halfway point, but what do we really know? The market rally has defied expectations from January 1 to the end of June, offering outsize returns. That has happened even despite the steady drumbeat of rising rates, recession prognostication, and inflation. Despite the market defying those narratives, true or contrived, investors and advisors know they should be prepared. Active ETF managers offer the expertise, insight, and tools to respond.
Those responses don’t have to require a downturn, either. While many might assume that active ETF managers’ adaptability only stands out in tough moments, active investing also regularly seeks to outperform indexes.
Active ETF investing equips investors with strategies that have broad remits but also much more responsiveness. Investors and advisors will be responsible for moving out of broad, slow-moving index funds themselves, while actives adapt. That might be why active ETFs have proven to be so popular this year, with active equity ETFs adding significant flows this year compared to prior years.
What’s more, active strategies also bring a stronger stock-by-stock approach that can pick out which names might rally next. If this U.S. market continues to defy a global downturn, identifying the right area to benefit next will be key. At the same time, some active strategies lean on identifying those firms with strong dividends, a notable indicator that firms can survive tough times.
T. Rowe Price offers a roster of active ETFs managed by dedicated portfolio manager teams. The firm’s stable of active ETFs includes the (TSPA ) and the (TDVG ). For investors concerned about when the rally’s dam might break, actives can provide one solution.
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