U.S. stocks have been pummeled in 2022, with the S&P 500 having declined at least 1% during 53 trading sessions so far this year, according to Dow Jones Market Data. Markets have been particularly volatile on Fridays — a day which has often been seen as a mellow one for stock traders.
Citing analysis from Bespoke Investment Group, MarketWatch reported that the S&P 500’s 2.4% decline on October 14 was the fourth Friday in a row that the index dropped at least 1%. Since last week, the S&P has marked a decline of 1% or more during 36.5% of Friday sessions so far this year, which Bespoke notes is a new record.
Danny Kirsch, head of the options desk at Piper Sandler & Co., cited two factors driving this end-of-week volatility. One is the importance of economic data like the monthly jobs report data, which is released on the first Friday of every month. The other is the surge in options trading for both U.S. equity indexes and single stocks (many options contracts expire on Fridays).
With the market continuing to swing wildly – even on traditionally uneventful trading days – it may be a good idea to have a steady hand guiding investors’ stock investing. That’s where active management can help.
While passive strategies lack the flexibility to adapt to changing market environments, active ETFs can offer the potential to outperform benchmarks and indexes. Plus, active managers with greater resources and greater scope benefit from economies of scale, which can often translate to better returns.
“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 ETFs, 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 ).
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.
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.
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