Eyeing Tax-Exempt ETFs? TAXE's Active Approach Stands Out

Core Insights - The T. Rowe Price Intermediate Municipal Income ETF (TAXE) offers an active investment approach in the tax-exempt ETF category, leveraging T. Rowe Price's research capabilities to provide income through municipal bonds exempt from federal income taxes [1][2]. Investment Strategy - TAXE charges a competitive fee of 24 basis points and targets intermediate maturity municipal bonds across various credit ratings and categories [2]. - The fund's active managers evaluate multiple factors such as prices, yields, credit quality, interest rates, and economic conditions to assess investment potential, allowing for flexibility to include high-yield municipal bonds [3]. Performance Metrics - Year-to-date, TAXE has returned 3.3%, outperforming the FactSet Segment average of 2% during the same period [4]. - The fund has achieved a yield to maturity of 4.07% as of August 31, according to T. Rowe Price data [4]. Advantages of Active Management - Active management in tax-exempt ETFs addresses limitations faced by passive funds, such as early bond calls that can disrupt allocations [4]. - T. Rowe Price's managers utilize the firm's fundamental research capabilities to gain deeper insights into the municipal bond market, potentially enhancing portfolio performance [4].