Active equity ETFs posted double-digit returns in April. Conflicting signals from the Federal Reserve and a fracture in global oil alliances created an environment where stock selection matters.
Key Takeaways:
- Three Fed dissents marked the most policy discord during Powell’s tenure as chair
- TACU returned 10.59% in April navigating conflicting earnings and Fed signals
- UAE’s OPEC+ exit raises oil supply uncertainty for active resource funds
Three Federal Open Market Committee members dissented from the decision to keep easing language in the April policy statement. This was the largest number of dissents during Jerome Powell’s tenure as Fed chair, according to T. Rowe Price’s weekly market update. The hawkish signal came as the S&P 500 Index returned more than 10% for the month, its best performance since November 2020.
Active managers were able to capture those gains by focusing on companies that met or exceeded earnings expectations despite the mixed policy signals. The T. Rowe Price Active Core U.S. Equity ETF (TACU) uses that approach and returned 10.6% over the past month, per ETF Database. The fund carries a 0.00% expense ratio through January 30, 2027 and holds $13.7 million in assets under management.
Among the companies driving those results, Alphabet, Inc. (GOOGL) posted robust earnings that contributed to April’s gains, T. Rowe Price traders noted. Alphabet shares jumped after the Google parent reported strong demand for artificial intelligence and cloud products showed its heavy investment in AI is starting to pay off.
Active Strategies Target Sector Opportunities
Oil prices added more than 7% over the past week as the United Arab Emirates announced its exit from OPEC+, according to T. Rowe Price. Its departure marks a break in one of the world’s most influential oil alliances and raises questions about the cartel’s ability to coordinate supply.
This fracture in traditional oil alliances creates opportunities for active natural resource managers to identify producers positioned to benefit from increased production rather than price-fixing arrangements. Targeting those opportunities, the T. Rowe Price Natural Resources ETF (TURF ) returned 19.7% year to date through April despite a monthly decline of 0.92%, per ETF Database.
The fund focuses on upstream companies engaged in exploration, extraction, and development of oil, gas, metals, minerals, and agricultural products.
Beyond U.S. markets, the European Central Bank and Bank of Japan held interest rates steady but acknowledged that risks to their economies had intensified due to the conflict in the Middle East, the report noted. The T. Rowe Price Active Core International Equity ETF (TACN) filters through those risks to overweight higher conviction stocks and returned nearly 5% in April and 6.5% year to date. TACN also carries a 0.00% fee through January 30, 2027.
Treasury yields climbed over the past week as rising energy prices and inflation concerns drove selling pressure in the bond market, T. Rowe Price noted. In an environment where broad indexes face pressure from conflicting macro headlines, finding undervalued companies becomes critical.
The T. Rowe Price Value ETF (TVAL ) uses that approach and returned 8.8% in April while holding $685.8 million in assets.
Powell said he will remain on the Fed’s Board of Governors for an undetermined period after his term as chair ends, citing political interference in the form of legal actions against the central bank as the reason for staying.
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