Stocks fell on Monday morning as investors anticipate the U.S. Federal Reserve’s policy meeting this week. In early trading Monday, the S&P 500 dropped 0.7%, while the Dow Jones Industrial Average lost 0.6%, and the Nasdaq Composite fell 0.6%.
Citing data from CME Group, the Wall Street Journal reported that investors anticipate an 80% chance that the Fed will raise interest rates by 75 basis points, and a 20% chance that the central bank will lift rates by a full percentage point.
“We’re afraid that the Fed could surprise us with another jumbo hike,” Florian Ielpo, head of macro at Lombard Odier Investment Managers, told the Journal. The Fed is expected to announce another aggressive interest rate hike on Sept. 21.
This morning’s market downturn not only suggests that investors believe the Fed will continue its hawkish path to raise rates, and that market volatility, record-high inflation, and investor uncertainty aren’t going away anytime soon. So, for investors who have a long-term investment horizon and want to have an expert at the wheel, active management may be a good fit.
While passive strategies often lack the flexibility to adapt to changing market environments, active ETFs can offer the potential to outperform benchmarks and indexes.
“Active managers have the flexibility to take advantage of market volatility and add to favored positions when prices become more attractive,” said Todd Rosenbluth, head of research at VettaFi.
As part of its lineup of active exchange traded funds, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP ), the T. Rowe Price Dividend Growth ETF (TDVG ), the T. Rowe Price Equity Income ETF (TEQI ), the T. Rowe Price Growth Stock ETF (TGRW ), and the T. Rowe Price US Equity Research ETF (TSPA ).
Neil E. Kays, senior product marketing manager at T. Rowe Price, explained that if passive management is like “putting your car on autopilot,” then active management is giving the manager “the ability to grab the wheel.”
“In the current market environment, having an active manager that can pivot is key,” Kays added.
T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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