In a challenging market environment for growth, value strategies provide an attractive alternative and portfolio diversifier. The actively managed T. Rowe Price Equity Income ETF (TEQI ) offers value exposure with a focus on income, making it an ETF worth consideration in 2025 markets.
Markets are rife with risk this year, from U.S. tariff impacts to ongoing and developing geopolitical tensions. With outlooks dimming for U.S. economic growth, a pivot to value strategies is worth consideration this year.
Value stocks trade at discounts to their fundamentals and generally lack the flashier elevated returns of their growth peers. However, what they give up in flashy performance, they make up for in reliability. In a challenging economic environment, these companies may prove attractive for their lower risk profiles and relatively consistent dividends (when applicable).
Active strategies also stand to benefit this year in ongoing volatility and changing market regimes. Through their ability to be selective about portfolio inclusions, these strategies are able to identify opportunities while adapting to evolving risks. In more complex categories like value, the experience and fundamental analysis that active managers provide could prove a boon.
Value, Equity Income & Actively Managed: A Solution for Everyone
TEQI combines value investing and income in one actively managed strategy. When selecting companies for inclusion, the portfolio managers seek those with an established history of dividend payments or undervalued companies.
The strategy targets companies with above-average dividend yields relative to the broad equity market. It also includes those with low price-to-earnings ratios compared to broader equities. The fund is currently up 3.82% on a total returns basis YTD as of May 19, 2025, according to Y-Charts data. On a trailing 12-month basis, TEQI generated total returns of 6.19% as of the same date.
TEQI focuses primarily on large-cap companies, though it can invest across the size spectrum. These companies exhibit a strong balance sheet. The strategy will also select some stocks based on reduced current prices compared to fundamentals. The research team for the fund believes the stocks included in the portfolio demonstrate the potential for capital appreciation as well as dividend consistency.
The fund makes a notable addition to equity portfolios for the diversification a value-focused strategy provides when many portfolios carry an overweight to growth. It also makes a strong addition to income portfolios, bringing income diversification through its equity exposures instead of bonds. TEQI carries an expense ratio of 0.54%.
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