Active ETFs continue their march toward ETF prominence, with an accelerating pace of launches year over year contributing to the overall expansion of the ETF space. Amid that growth, certain active ETFs have stood out, with rising AUM levels matching their performance potential. The actively managed T. Rowe Price U.S. Equity Research ETF (TSPA ), recently crossed the $2 billion AUM milestone, marking another step forward for active ETFs.
See more: Adding Municipal Bonds? Don’t Ignore Active ETFs
The active ETF has seen its AUM rise by $618 million over the last six months, per ETF Database data. It has done so with a combination of flows and price appreciation. TSPA has added $225 million in net inflows, per ETF Database data, over the last six months, as of October 22. It has done so while performing well, returning 14.2% YTD.
That has outperformed the fund’s ETF Database Category average in that time. What’s more, the fund has also outperformed its average over one- and three year-periods.
How, then, does it invest? TSPA charges a competitive 34 basis point fee for its approach. The fund applies a research-based portfolio construction process designed to provide similar economic exposure with an outperformance goal beyond the benchmark portfolio construction process. It leans on T. Rowe Price’s fundamental analysis capabilities to do so. That has led TSPA to a portfolio of key stocks contributing heavily to overall stock market growth.
What might its outlook be looking ahead? TSPA’s focus on fundamental research gets the most out of the active ETF wrapper and approach. A fund like TSPA offers more flexibility than passive, investment-by-committee strategies that may fail to adapt while tightly tracking their index’s rules.
At the same time, it doesn’t oscillate wildly between positions. Instead, its goal is to outperform its benchmark and peers by identifying firms that meet strict guidelines, able to perform long term. Together, that could make it an appealing active ETF option for those looking to add active exposure to their portfolios. As the year draws to an end, TSPA could be worth considering.
For more news, information, and analysis, visit our Active ETF Content Hub.
