When discussing 2025 markets, the word “unprecedented” gets frequently bandied about. Concerns that the U.S. is on the precipice of monumental, foundational change that will impact not just the domestic economy but the world’s as well weighs heavily for many. It’s the kind of environment where investors should return to multiyear investing frameworks and fundamentals, according to T. Rowe Price, to navigate uncertainty.
“I’ve been in the markets for a long time — this level of uncertainty is as high as I can remember, and when you have this much uncertainty, it results in fear and reacting to every data point,” explained Josh Nelson, head of global equity, T. Rowe Price, in a recent webcast hosted on the VettaFi platform.
A number of headwinds create a challenging outlook for U.S. equities this year. Weakening consumer spending and confidence, economic policy uncertainty, and tariffs all weigh heavily on U.S. outlooks this year. Looking to the second half of 2025, some economists increasingly forecast for recession — or float the potential that the U.S. may already be in recession. In difficult times like these, keeping an eye to the fundamentals proves beneficial for investors.
“As an equity investor, I think it’s really important to stay focused on the multi-year outlook when investing in times like this,” Nelson cautioned. “These are the times when doing your homework, really knowing your investments well, understanding how changes can impact fundamentals, is more important than ever.”
In this year’s tumultuous market environment, a renewed focus on company fundamentals becomes vital. Understanding how a company may perform across a range of market conditions allows for investors to seize opportunities or minimize risks as they arise. Nelson doesn’t expect a collapse of the global trade or finance system, but does anticipate significant changes. These changes, and the volatility that surrounds them, may create pockets of investing opportunity.
“One piece of advice I give to investors at T. Rowe is to use volatility to your advantage,” noted Nelson. “So, times like this, markets get disorderly. If you’ve really done your homework and you have a multi-year time horizon and you know what the good companies are, you can lean in when others are fearful.”
Investing in Active ETFs During Ongoing Volatility
Active ETFs are a solution advisors and investors increasingly turn to when navigating ongoing market volatility. Tim Coyne, head of ETFs, T. Rowe Price, discussed the explosion of active ETF strategies in recent years and the increasing market share they carve out.
“Last year, nearly 80% of all launches were in active ETFs,” Coyne noted. "Last year, active ETFs took in about 25% of flows, so far outpacing their market share.”
Increased adoption could be attributed to the evolution and efficiency of the ETF wrapper. The affordability and tax-efficiencies of ETFs combined with the potential benefits of active management continue to appeal to investors.
Another factor is likely the growing number of true active strategies now captured in an ETF. “I think it’s because the active of today is so much more nuanced,” said Coyne. “This isn’t just about chasing outperformance over the S&P 500. It’s really being tactical, it’s really being nimble, and it’s really having great managers to navigate the space.”
T. Rowe Price currently offers a suite of actively managed ETFs, including 13 equity and six fixed income strategies. The firm boasts almost 1,000 investment professionals worldwide, and 365 research analysts. These teams help to construct bottom-up research analysis used by the funds’ active managers when making investment decisions in alignment with the individual strategies. And the firm plans to continue growing the ETF suite looking ahead, according to Coyne. “We have a robust product roadmap for 2025 and into 2026, so we are going to continually expand our product offering.”
Popular funds from the firm include the T. Rowe Capital Appreciation Equity ETF (TCAF ) and the T. Rowe Price International Equity ETF (TOUS ). Investors also turned to the T. Rowe Price QM U.S. Bond ETF (TAGG ) this year amidst volatility.
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