Despite the global volatility surrounding markets, U.S. stocks have proven durable. The market has chugged along, anticipating long term growth despite major energy costs rising. Investors rightfully see opportunity in tech stocks, but fear the long term risk from concentration risk. Despite those concerns and risks, however, the active tech ETF TTEQ has stood out this year and in the last month.
Key Takeaways:
- Active investing in the ETF wrapper has blossomed in recent years, with concentration risk a great opportunity for their use.
- TTEQ’s tech focus could make it an option to watch to address concentration risk.
- Bottom-up portfolio construction can help find stand out innovators potentially before other market cap index funds do.
(TTEQ ), the T. Rowe Price Technology ETF, has returned 13.4% over the last month according to ETF Database data. It has also returned 8.42% YTD. The fund has outperformed the S&P 500 with those numbers, taking an active approach that lets it balance the key tech firms with innovative names.
Specifically, the strategy charges a 63 basis point fee to invest in companies identified by T. Rowe Price’s team as a mix of well-established technology and tech-driven firms and those with key innovations. Managed by T. Rowe Price portfolio manager Dom Rizzo, the fund leans into tech firms based on fundamental research, valuation, share price appreciation potential, and business prospects.
The active tech ETF leans into firms that are technology-focused across segments. Not just A.I. tech names, but also those in other key segments. It can invest with its bottom-up approach across U.S. and non-U.S. markets. What’s more, the fund has the option to be “AI on” or “AI off,” which can help it outperform static, inflexible index strategies.
See more: Analysis: Active ETFs Lapped Passive ETF Inflows in March
Together that has helped the fund gather some $180 million in AUM in less than two years. The strategy has added almost $50 million over the last three months, too, with its price having recently risen above its 50 and 200-day simple moving averages. That traditionally indicates healthy momentum for a security, which may make for a solid buy opportunity.
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