Core Insights - Foreign equities performed well in 2025, driven by trends outside the U.S. and tariff-related uncertainty, leading U.S. investors to seek ex-U.S. offerings [1] - The same trends are expected to continue into 2026, prompting renewed interest in foreign equities [1] Company Insights - T. Rowe Price has launched the Active Core International Equity ETF (TACN), which charges a zero basis point fee until January 30, 2027, and 0.2% thereafter [2] - TACN combines quantitative research with fundamental analysis, aiming to maintain disciplined risk controls, making it a robust long-term active solution for foreign equities allocations [4] Industry Insights - Active ETFs are gaining popularity among investors for their flexibility and fundamental analysis capabilities [3] - The current market conditions, including a declining dollar and inflation uncertainty, present significant opportunities in ex-U.S. equities, making TACN's active core approach appealing for portfolio refreshment [6]

Core Insights - Avantis Investors combines active and passive investing strategies to enhance portfolio performance, particularly through its "Systematic Active" approach in equities and fixed income ETFs [1] - The firm has surpassed $100 billion in total fund assets under management (AUM) since its inception in 2019, focusing on cost-conscious investment strategies while leveraging active management for customized asset allocations [2] Performance Highlights - The Avantis International Small Cap Value ETF (AVDV) has achieved a year-to-date return of 49.2%, significantly outperforming its category average across various time frames [4] - AVDV charges a fee of 36 basis points and aims to combine the benefits of indexing, such as transparency and diversification, with active management's value-driven decision-making [3] Investment Strategy - AVDV's strong performance is attributed to its focus on mining and metals firms, with no single sector exceeding 17% of the portfolio as of December 23rd [5] - The ETF is positioned as a strong long-term hold for investors seeking exposure to foreign equities, effectively integrating both active and passive investment strategies [5]

Core Insights - Emerging market equities, including ex-U.S. stocks, have shown strong performance in 2023, providing significant upside outside of major tech stocks driven by AI [1] - Geopolitical risks have escalated, complicating foreign investments, with events like the Russian invasion of Ukraine and tariff wars creating layered challenges [1][2] - Active ETFs can leverage fundamental research to navigate geopolitical volatility, potentially outperforming passive funds in uncertain markets [3][4] Investment Strategies - Passive funds face challenges in low-information markets, as strict allocation rules can hinder performance during geopolitical events [2] - Active ETFs, such as the T. Rowe Price International Equity ETF (TOUS), utilize fundamental research to identify firms with strong cash flow and profitability, allowing for quicker adaptation to external shocks [4] - The flexibility of active ETFs positions them as a valuable addition to portfolios, especially in the face of geopolitical risks where passive funds may struggle [5]

Group 1 - The US Dollar Index (DXY) is experiencing a strong second half of 2025, with a 2% increase, marking a bullish reversal from significant losses in the first half of the year [1] - Despite the typical negative impact of a rising dollar on foreign equities, there have been notable gains in this sector [1]