Economic dislocations create opportunities. While many market watchers are seriously concerned about the microshifts in markets and stocks, others may see the opportunities that emerge when oil prices spike. Certain companies may be better poised to handle those costs. Others may even see ways to grow or make moves in that volatility. This key portfolio shift can help portfolios in the near and long terms, despite growing concern about those oil prices.
See more: Three Income ETFs to Watch Amid U.S.-Iran Volatility
Investors can use this moment of the S&P 500 decline and spiking oil prices to make a big, structural portfolio shift. By shifting from passive to active core equities, investors can add durability and potential for upside to their portfolios. Where historical cost has been a barrier to getting active advantages in a core allocation, new, low-cost active core ETFs may provide the best parts of indexing and active management.
Oil Prices See Rocky Outlook: Why This Core Change Can Help
The T. Rowe Price Active Core U.S. Equity ETF (TACU) and the T. Rowe Price Active Core International Equity ETF (TACN) each offer U.S. and international core views that can play a foundational role. Both currently charge 0% expense ratio though January 30, 2027. And after the fee waiver expires, they both remain very competitively priced at only 0.14% and 0.20%, respectively. Using T. Rowe Price’s fundamental research capabilities is looking like the essential part of that role.
TACU, which launched in December, actively invests in U.S. large caps. The strategy combines fundamental research with quantitative models to guide its investing decisions. Furthermore, the fund takes a bottom-up approach, considering measures like profitability, financial stability, earnings quality, and more. The portfolio is designed to deliver similar characteristics to the Russell 1000 Index, but with the potential for additional return from an active management.
For an international exposure, potentially seeing even more dislocation than for domestic U.S. equities, TACN offers a potent option as well. It broadly applies the same approach as TACU, but instead as a core option for international equities. The portfolio is designed to deliver similar international exposures as the EAFE Index (Net), but again, with the potential for additional return.
Why now to make that shift? Rising oil prices will likely present too much short-term volatility for swapping equities to be an efficient option. Active investing can be a more viable alternative with firms better poised to deal with price shocks or even overachieve in tough times. Active ETFs like TACU and TACN could be strong options to make portfolios more flexible and adaptable for uncertain times.
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