On Wednesday, T. Rowe Price (NASDAQ-GS: TROW) announced the addition of three new fixed income exchange-traded funds (ETFs) to its active ETF roster. These new ETFs include the Total Return ETF (TOTR), the Ultra Short-Term Bond ETF (TBUX), and the QM U.S. Bond ETF (TAGG), and they will be available to the public beginning today on NYSE Arca, Inc.
The new ETFs were selected as core fixed income strategies that can serve as building blocks to a client portfolio. Each will be managed by the same investment team and processes as the existing mutual fund version with a similar strategy, utilizing the firm’s long-standing strategic investing approach, characterized by rigorous research, risk awareness, and independent decision making.
These new fixed-income ETFs expand T. Rowe Price’s total ETF offerings to eight funds. The other five are equity funds, four of which launched in August 2020 and one in June 2021. The firm’s lineup of active ETFs complements its traditional mutual fund offerings, and delivers key features typically associated with ETFs that some investors may prefer, including continuous daily trading, real-time market-determined pricing, and tax efficiency.
“These three new offerings will reflect the time-tested and alpha-seeking approach that characterizes T. Rowe Price’s fixed income management,” says Andy McCormick, Head of the Fixed Income Division. “Reinforced by the best ideas of our global research team and their combined decades of strategic investing expertise, these core fixed income strategies present attractive options to investors who prefer the ETF format.”
Talking TAGG, TOTR & TBUX
TAGG seeks to provide a total return that exceeds the performance of the U.S. investment-grade bond market. It uses its modest tracking error budget to seek to outperform the Bloomberg U.S. Aggregate Bond Index on a net of fee basis. The fund is managed by Robert Larkins, who has 18 years of investment experience, all at T. Rowe Price. TAGG has a net expense ratio of 0.08%.
TOTR seeks to maximize total return through income and, secondarily, capital appreciation. It combines all-weather portfolio construction techniques with tactical market insights to generate income and attractive risk-adjusted returns across market cycles. The fund is co-managed by Chris Brown, who has 21 years of investment experience, 16 of which have been at T. Rowe Price, and Anna Dreyer, who has 12 years of investment experience, all at T. Rowe Price. TOTR has a net expense ratio of 0.31.
TBUX seeks a high level of income consistent with low volatility of principal value. It Intends to provide a high level of income while minimizing principal volatility by using a broadly diversified portfolio composed of shorter-term government, investment-grade corporate, and securitized bonds. The fund is managed by Alex Obaza, who has 16 years of investment experience, 13 of which have been at T. Rowe Price. TBUX has a net expense ratio of 0.17%.
Tim Coyne, Head of ETFs, adds, “With the latest addition of fixed income ETFs to our suite of active ETF offerings, investors now have access to a wider selection of T. Rowe Price investment strategies in whichever product format best fits their needs. We’re pleased to continue to grow our ETF capabilities now across both the equity and fixed income asset classes with strategies that have demonstrated success and strong client interest.”
For more information, visit troweprice.com.