As 2024 rolls toward its halfway point, the active ETF boom continues apace. Last year’s banner year for actively managed ETFs did quite a bit to gather investor attention. If that is the case, then 2024 has plenty of choices for investors. One top active ETF this year, the T. Rowe Price U.S. Equity Research ETF (TSPA ), is hitting its three-year milestone just as investors may be flocking to such an opportunity.
See more: Active ETF TSPA Among Top Ten Performers Over One Year
TSPA launched on June 8, 2021. The strategy will hit its three-year ETF milestone in less than a week. Traditionally, when a strategy hits that point in its lifespan, it earns a place on many brokerages. That opens it up to receive new inflows, for example. What’s more, it’s not just brokerages that give ETFs more respect when they turn three; many investors only consider ETFs with track records and solid AUM.
TSPA recently crossed over half a billion dollars in AUM, a signal of continued momentum. The top active ETF has been a leading performer in the active space over the last one-year period among active funds, with at least half a million dollars in AUM.
So, how does the ETF invest? TSPA looks for long-term capital growth. It aims to offer similar exposure to the S&P 500, offering a sector-neutral weighting. But instead of holding stocks selected by an index committee once per year, specialized industry-level research analysts select the stocks to represent the portfolio. Unlike static indexes, this fundamental security selection places a premium on quality and provides the forward-looking flexibility to adapt to changing market environments.
That has helped TSPA return 34.2% over the last one-year period, per T. Rowe Price data. Looking forward, it stands out as a potentially potent option for those looking add an active strategy as a complement or replacement for core equity exposure often overweighted by indexes. With both tailwinds and headwinds floating around the macroeconomic environment in the back half of this year, the actively managed TSPA may appeal.
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