With active investing in ETFs on the rise, investors may be looking for leading options. After all, when a sector takes a big leap, people want to know what all the fuss is about. Active ETFs have been around for some time, but in this new era for the vehicle type, strategies like TSPA may stand out. The active ETF is a top ten performer over one year among strategies with at least $500 million in AUM and three-year track records.
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Why apply those filters when looking for leading active strategies? Many investors want to see a certain amount of liquidity in a strategy before considering it. Meanwhile, track records offer important data for newer ETFs—although TSPA does have a similar mutual fund cousin, managed by the same team, with almost three decades of market outperformance. As mentioned above, a crop of strong, active funds emerges when applying those standards, with TSPA as a leading member.
The T. Rowe Price U.S. Equity Research ETF (TSPA) charges only 34 basis points (bps) for its approach. According to T. Rowe Price data, the strategy has returned 34.2% over one year. VettaFi’s ETF Database places it in the top ten in that period based on the above metric.
So, how does the active ETF invest? The strategy looks for long-term capital growth that provides similar exposure to the S&P 500. It also looks to be sector-neutral by weighting industries similarly to the S&P 500. TSPA looks to differentiate itself, then, with its active managers leveraging T. Rowe Price’s research to over or underweight individual securities, or select additional securities, to better represent those industries beyond the index.
The strategy will officially hit its third birthday in just over a week. With the U.S. economy presenting continued questions about interest rates and inflation, an active ETF like TSPA might appeal.
For more news, information, and analysis, visit the Active ETF Channel.
