T. Rowe Price Sees Active ETF Assets Nearly Double

Core Insights - T. Rowe Price Investment Management's active ETF asset base has nearly doubled in the past year, indicating a shift towards funds focused on stock and bond selection rather than passive index tracking [1][4]. Group 1: Market Trends - The ETF market is experiencing a division between "sharp objects," which are risky single-stock and leveraged products, and strategic active funds managed by experienced portfolio managers [2]. - Active ETFs now account for approximately 11% to 12% of total ETF assets, a significant increase from lower levels three to five years ago, with projections suggesting growth to the "higher teens" percentage within five years [4]. Group 2: Fund Performance - The T. Rowe Price Capital Appreciation Equity ETF (TCAF), launched in June 2023, has grown to over $6.3 billion in assets by employing fundamental research to construct a portfolio of around 100 companies [5]. - TCAF focuses on capital allocation quality and long-term potential, contrasting with the volatility associated with leveraged products [5]. Group 3: Investment Strategies - Advisors utilize active ETFs in various ways, with some employing options-based strategies for income, while strategic stock-picking funds like TCAF aim to outperform through security selection rather than leverage [6].