Earnings season has shifted into gear with Microsoft (MSFT) and Alphabet (GOOGL) dropping earnings news Tuesday. With other big names including Amazon (AMZN) also arriving this week, active ETFs in earnings week could be a potent option. Whether that means an active strategy adapting to the data earnings provide or to the earnings themselves, actives’ growing popularity right now can help.
Why active? Active ETFs may have arrived into the ETF landscape years ago mostly as thematic strategies, but performance-wise, they’ve earned some respect this year. Now, investors and advisors can go into active strategies with a bit more confidence. So why consider an active approach to earnings season?
For one thing, consider the cost of trading multiple distinct stocks. So much of earnings season involves moving in and out of stocks based on the big info dumps that come via earnings. Trading each separate stock incurs a cost, but trading in or out of an ETF with exposure across an earnings-heavily sector avoids that issue. Add in active management and that pushes an active ETF’s merits further, increasing flexibility as new information comes in.
Active ETFs in Earnings Season
Earnings season holds a lot of key information about the broader environment, especially given how much the Fed is eyeing new data. Markets entered 2023 with an eye on big hits to earnings, particularly to some of the largest tech names. That hasn’t happened, but active ETFs are positioned and able to respond if this earnings season becomes a turning point.
T. Rowe Price has several active ETFs for investors and advisors to watch. Whether focused on income or growth equities, the shop offers a variety of options including the T. Rowe Price Equity Income ETF (TEQI ) and the T. Rowe Price Growth Stock ETF (TGRW ).
For more news, information, and analysis, visit our Active ETF Channel.