The tariff story comes and goes, but one thing remains clear: The Trump administration intends to continue pushing the topic. Tariff uncertainty has the potential to significantly impact portfolios, from the cost to firms’ supply chains to consumer spending. Investors may, then, want to add some income as helpful ballast. An income ETF, particularly with an active approach, could provide a strong set of options.
See more: Should You Invest in Global or International ETFs?
The T. Rowe Price Equity Income ETF (TEQI ) offers one contender therein. TEQI charges a 54 basis point fee for its approach. The active equity income ETF, which will celebrate its fifth anniversary next month, invests in global large-caps. It looks for names poised to outperform the Russell 1000 Value Index based on key stats, like low price-to-earnings ratio.
Additionally, the strategy looks at firms with above-average dividend yield and low stock price relative to company fundamentals. Together, that has helped the ETF offer a 1.7% dividend yield, per YCharts. It has also returned 11.5% over the last three years, according to ETF Database data. That outperformed the fund’s FactSet Segment average in that time, which returned 6.9%.
The fund has invested in some strong performers to achieve those portfolio returns. For example, it currently holds stock in Metlife, Inc. (MET) which has outperformed the S&P 500 Total Return index over the last five years, per YCharts. The insurance giant has done so while providing solid dividend yields; currently it offers a 2.9% forward dividend yield per YCharts.
TEQI also invests in utility leader Southern Company (SO) which currently provides an appealing 3.15% dividend yield. According to YCharts, SO has returned more than 16% YTD, outperforming the S&P 500 Total Return index in that time. As tariff threats gather strength ahead of August 1, investors may be looking to adapt. An active equity income approach like TEQI’s can not only provide current income, but also flexibility. With the full impact of tariffs hard to predict, TEQI’s investment flexibility could provide a strong addition to portfolios.
For more news, information, and analysis, visit our Active ETF Content Hub.
