One of the more important and interesting market events comes this Wednesday. It’s not a jobs report or Fed meeting, but rather, Nvidia (NVDA) earnings. The firm looms over the tech sector, and therefore, the broader stock market. The firm’s production of critical chips makes it a key player, then, and one for investors to watch. Of course, responding to earnings news may require more flexibility than passive investing can muster. Active, tech investing via active tech ETFs can stand out when major market news drops, instead.
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Active investing empowers a fund or ETF’s managers to adapt to events, but also to under- or overweight firms. Index funds often must meet certain requirements in their indexes that keep them limited on that front. What’s more, active managers can lean more heavily into fundamental research and apply their experience to assessing firms.
More importantly for Nvidia earnings, however, active tech ETFs can outdo passive funds with their responsiveness. Whereas index funds often require index operators to meet before they can adjust, active managers can act with greater speed. Should earnings surprise markets, that level of adaptability could see active tech ETFs stand out in the short and medium terms.
Right now, Nvidia earnings look set to for a positive outcome this week. Despite many investors being overweight tech, and AI perhaps throwing off tech valuations, tech remains a key market driver. Active funds have performed well year to date in beating some more standard index funds, and can continue to do so. Especially as rate cuts loom, looking to active tech and growth funds can appeal.
The T. Rowe Price Technology ETF (TTEQ) presents one intriguing opportunity therein. The strategy charges 63 basis points for a targeted, active focus on tech. Leaning on T. Rowe Price’s fundamental research capabilities, it may be one to watch.
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