It’s hard to ignore the market selloff facing investors right now. The S&P 500 has fallen almost 10% over the last month, while the Dow has dropped 8.6% in that time. The drop-off has taken a serious bite out of many investors’ 401(k)s and portfolios amid ongoing tariff-related uncertainty. However, one active ETF has bucked that selloff, offering the flexibility and performance investors may want to add.
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That fund, TOUS, the T. Rowe Price International Equity ETF, has returned 12.3% YTD, according to YCharts data. That marks a significant difference from how much major domestic indexes have performed. What, then, is helping that active ETF perform so well amid that downturn?
TOUS, which only charges a 50 basis point (bps) fee, launched in 2023. Having returned 20.3% since inception, per YCharts data, the fund actively invests in ex-U.S. stocks of any capitalization that are attractively priced and seen as offering high growth potential. Specifically, the fund looks for quality business models, high earnings potential, and solid valuations. Together, the fund’s fundamental, bottom-up approach produces a portfolio of 140-170 stocks total.
That fundamental, active focus can help the fund outperform other ex-U.S. equity funds. The active approach can adapt to potential geopolitical risks or events. Relying on T. Rowe Price’s global research resources, its fundamental focus can scrutinize foreign firms and provide more information – a significant information advantage for U.S. investors looking abroad. That approach has helped TOUS not only outperform domestic indexes but also beat the MSCI ACWI Ex USA Net Total Return Index YTD per YCharts, as well.
The active ETF could provide an important boost for portfolios looking ahead. If the U.S. does enter a recession, or if uncertainty impacts the dollar, foreign firms could stand out by comparison. What’s more, ongoing trends in supply chain reorganization could also boost those foreign firms.
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