With tariffs implemented this week after much discussion, markets took a severe tumble. Tariff news saw major indexes like the S&P 500 drop significantly. The key index shaved off almost a full 5% of its value, a major bite not only out of its value but also that of countless portfolios. Investors may believe they have to either stick or twist when facing that sell-off tension, but the reality is more complex. Active investing can help portfolios adapt without needing to leave the market entirely.
See more: T. Rowe Price Head of ETFs Tim Coyne on Active in 2025
How can active investing help investors stay invested? As active ETFs have grown in popularity and significance, so too have their use cases. Specifically, investors may want to consider how active ETFs can upgrade core allocations. Previously, high fees may have turned investors away from using active funds as core allocations. Now, however, many active ETFs offer core strategies at respectable fees.
Making a swap, then, could prove worthwhile as tariff news worsens. Not only are the fees a bit lower, but the adaptability should not be ignored. Active management can help a fund adapt to tariff news. For example, an ETF’s fundamental research capabilities could help it better predict which firms will be more or less harmed by tariffs. Rising supply chain costs may impact certain firms more than others. At the same time, fundamental analysis can also help identify firms with healthier balance sheets.
The T. Rowe Price Capital Appreciation Equity ETF (TCAF ) could potentially appeal amid that tariff news. TCAF charges a competitive 31 basis point fee, making it a potential candidate for a more core-type role. Managed by David Giroux, its ability to leverage T. Rowe Price’s fundamental research capabilities could appeal.
Tariffs look like they’re here to stay — for now. While investors may be feeling some fear amid volatility, they need not flee markets entirely. Active investing can keep investors in the market but help their portfolios adapt — and potentially outperform.
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