U.S. equities have been wildly unpredictable this year, as high inflation, a hawkish Federal Reserve, and war in Ukraine have battered markets. In a sign that the future of stocks is uncertain, even prominent Wall Street strategists can’t agree on what lies ahead.
Morgan Stanley’s chief U.S. equity strategist and CIO Mike Wilson recently argued that stocks are due for a short-term rally. In a note to clients, Wilson wrote: “The 200-week moving average is a serious floor of support until companies fully confess or a recession officially arrives, both of which could take several more months and lead to a technical rally in the short term.”
Meanwhile, the typically bullish Marko Kolanovic, JPMorgan Chase’s chief global market strategist, has displayed more caution for the next few months, deciding to trim risk allocations in the bank’s model portfolio. Kolanovic cited hawkish central banks and the war in Ukraine as the primary reasons why he cut the size of his equity overweight and bond underweight allocations.
“The shifting – and diverging – views between Wall Street firms highlight the uncertainty facing equities for the remainder of the year,” according to Bloomberg. “In the latest Bloomberg survey of strategists, the highest year-end target shows a rise of nearly 39% for the S&P 500 from Monday’s close, while the lowest prediction suggests a nearly 13% drop.”
In times of sustained uncertainty, investors may want to employ active management. 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.
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