For value-oriented investors seeking a lower-risk approach to long-term capital appreciation, T. Rowe Price has an active ETF that can satisfy. Launched in August 2020, the T. Rowe Price Equity Income ETF (TEQI) invests at least 80% of its net assets in common stocks, with an emphasis on large-capitalization stocks that have a strong track record of paying dividends or that are believed to be undervalued.
TEQI is an appropriate investment for those in need of a core holding for the equity portion of a portfolio. The fund has a focus on above-average yielding value stocks and seeks to provide a relatively steady source of return through a focus on stocks that generate above‑average historical income and long‑term capital appreciation potential.
The fund can enhance return potential over time through reinvesting and compounding, and the dividends have historically helped to reduce fund volatility. Additionally, TEQI is able to deliver this actively managed strategy with an expense ratio of only 0.54%.
The fund typically includes a broadly diversified portfolio of between 100 and 125 names within the U.S. large‑cap universe trading below T. Rowe Price’s assessment of intrinsic value without excessive exposure to any one stock, industry, or sector. Risk is managed through diversification and rigorous fundamental research at the individual company level.
Stocks are selected by an experienced portfolio manager with a long history of managing large-cap value equities. The fund is managed by John Linehan, who has served as portfolio manager of the T. Rowe Price Equity Income Fund for four years. Linehan has 30 years of investment experience, 21 at T. Rowe Price, and is one of the firm’s U.S. Equity CIOs.
In addition to TEQI T. Rowe Price currently offers three other actively managed ETF strategies, which are the T. Rowe Price Dividend Growth ETF (TDVG), T. Rowe Price Growth Stock ETF (TGRW), and T. Rowe Price Blue Chip Growth ETF (TCHP).
All four 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. At the same time, it also protects the firm’s investment professionals’ intellectual property and the interests of its ETF shareholders.
For more information and strategy related to active ETFs, visit our Active ETF Channel.