ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Active ETF Channel
  2. Reviewing the Case for Active Equity ETFs
Active ETF Channel
Share

Reviewing the Case for Active Equity ETFs

Tom LydonAug 29, 2022
2022-08-29

The U.S. exchange traded funds industry is roughly three decades old, and even today, the universe of equity-based ETFs remains largely dominated by passive offerings.

There are good reasons for that, including low fees and a creation/redemption process that creates tax benefits relative to actively managed mutual funds. However, the perks possessed by passive ETFs can and do extend to their active counterparts. Additionally, amid this year’s turbulent market environment created by rising inflation and high inflation, some investors are seeking out the comfort and potential strategic advantages offered by active management.

“They’ve gradually gained momentum among once-skeptical active managers in recent years, though, thanks to innovations designed to satisfy the concerns of heretofore hesitant active managers as well as desperation to stem the tide of asset flows from traditional mutual funds to ETFs,” noted Morningstar analyst Stephen Welch.

Adding to the case for active equity ETFs is familiarity. Translation: Many of the active fund managers that investors came to know and love prior to the dawn of ETFs are now in the ETF game. Many have joined that game in a big way, with one popular strategy being to launch ETF equivalents of famed active mutual funds. T. Rowe Price is part of that group.

“T. Rowe Price’s five semitransparent ETFs include versions of T. Rowe Price Blue Chip Growth (TRBCX) and T. Rowe Price Growth Stock (PRGFX), both rated Silver. The ETFs give investors without institutional-sized assets access to well-managed strategies at institutional prices,” added Welch.

The issuer’s ETF lineup features several blue-chip, equity income plays, including the T. Rowe Price Blue Chip Growth ETF (TCHP C+), the T. Rowe Price Dividend Growth ETF (TDVG B), and the T. Rowe Price Equity Income ETF (TEQI B). That trio could be highly appealing to investors today because dividends are rising, dividend stocks often beat inflation, and they are less volatile than non-payout names.

T. Rowe Price ETFs are already delivering some benefits for investors, particularly on the capital gains front, as highlighted by Morningstar’s Welch.

“These ETFs also have been more tax-efficient than their mutual fund twins since they started in late 2020. Both T. Rowe Price Blue Chip Growth and T. Rowe Price Growth Stock distributed roughly 10% of NAV in capital gains in 2021 versus less than 1% for the ETFs, owing in part to the tax advantages of the ETF and the fact the new ETFs probably had lower embedded gains,” according to the analyst.

Other ETFs in the issuer’s lineup include the T. Rowe Price Growth Stock ETF (TGRW C) and the T. Rowe Price U.S. Equity Research ETF (TSPA C).

For more news, information, and strategy, visit our Active ETF Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X