If 2023 has been the year of actives, which strategies have shown out? With a tumultuous 2023 more than half over already, actives bear a closer look. Among $100 million-plus actives, a few key strategies stand out, including the (TCHP ). The active growth ETF charges the second-lowest fee in the top ten actives above $100 million in AUM, according to LOGICLY. It’s also nearing a key three-year ETF milestone, inviting a look from some new eyes as markets enter the back half of the year.
TCHP has returned 33.6%, charging just 57 basis points (bps). That fee stands out as the second lowest among the other top performers charging as much as 99 (bps). In a year in which tech has powered through rising rates and inflation, concentrated tech ETFs have also stood out in actives. More diversified actives do, however, offer comparatively better flexibility when needing to move between information technology subsectors or across other industries altogether.
So how has TCHP produced those returns, and where might it be looking for the rest of the year? TCHP targets firms with experienced management, strong fundamental financials, and dividend growth. The active growth ETF also looks out for those firms with leading market positions. TCHP’s managers look for above-average growth from industries with a positive outlook, with information tech specifically buzzing amid AI’s rise. TCHP’s holdings may have a slight overweight towards information technology at times.
A recent insight co-written by one of TCHP’s managers at T. Rowe Price recently touched on the potential and risks of so-called “generative” AI. That white paper emphasizes that while the biggest tech names might push AI the most, firms of all sizes will be shaped by its impact. The paper underscores that while (GOOGL) has the AI lead thanks to data and talent advantages, it has challengers.
For T. Rowe Price’s managers and TCHP’s managers, too, AI has key implications for investing. They are eyeing those firms that work on the innovations that undergird AI, like ChatGPT. Whether that means cloud computing or increasingly powerful chips, that research informs the investing work across the firm, including TCHP.
With the active growth ETF hitting its third birthday next month, investors may want to take a closer look. The strategy has been sending a strong buy signal according to its 50-day and 200-day Simple Moving Averages (SMAs), too. For those investors and advisors looking at getting more active ETF exposure in 2023, TCHP stands out as a potent option.
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