With Nvidia (NVDA) earnings dropping later today, investors are likely watching closely. NVDA’s chips undergird several key market segments in tech, including many of the firms in last year’s so-called “Magnificent Seven.” NVDA is one of those seven, and as such, its earnings loom large over many investors’ portfolios. Rather than simply waiting for NVDA earnings, however, investors may want to consider how one investment strategy can get more out of their NVDA exposure.
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That strategy? Active investing. An active ETF can provide significant exposure to NVDA without holding it by itself. That doesn’t just offer some impactful diversification; such an approach can also provide exposure to firms benefitting from NVDA’s success. An active tech ETF, for example, would likely hold NVDA as one part of a broader tech picture buoyed by the chipmaker’s growth.
Perhaps most beneficial in an active strategy, however, is active investing’s flexibility. A significant drop-off for NVDA earnings today could take a big bite out of markets. Not only would investor portfolios, many of which rely on NVDA as a key stock, struggle, but market fear could rise on bad NVDA news.
In that scenario, an active ETF could provide the level of adaptability and flexibility needed to still meet investor goals. An active tech ETF could, for example, look to tech firms with strong foundations based on fundamental research. Those firms may be better positioned for a broader tech downturn. By the same token, should tech bounce on a healthy report from NVDA, an active tech ETF could blossom, in turn.
The T. Rowe Price Technology ETF (TTEQ ) could provide one intriguing option therein. Charging 63 basis points, the fund provides an active approach to tech supported by T. Rowe Price’s research capabilities. With NVDA earnings later today, active investing might provide a compelling opportunity.
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