Core Insights - Active ETFs are gaining significance among investors, with flows expected to reach another record due to increasing launches [1] - The T. Rowe Price Health Care ETF (TMED) has shown strong performance, returning 11.8% over the last three months and 10% over the last month, outperforming its category averages [1] - TMED's active management and fundamental research focus are key drivers of its solid returns, investing in a diverse range of healthcare stocks globally [1] Performance Metrics - TMED charges a fee of 44 basis points and has outperformed the ETF Database Category average of 8% and 6.3% over three and one-month periods, respectively [1] - The FactSet Segment averages were 7.6% and 5.3% for the same periods, indicating TMED's superior performance [1] - As of October 6, TMED's price was $27.97, above its 50-day simple moving average of $25.37, signaling a buy opportunity [1] Investment Strategy - TMED employs a bottom-up investment approach, holding a portfolio of 100–150 stocks across biotechnology, pharmaceuticals, products and device providers, and healthcare service companies [1] - The ETF's active strategy may benefit from falling interest rates and ongoing AI innovations, which could enhance productivity and innovation in the healthcare sector [1]

Core Insights - Healthcare innovation and biotechnology are currently highlighted as promising investment areas, particularly following September's rate cut which has improved prospects for R&D and new drug discoveries driven by AI [1] - Active investing in biotech may outperform passive strategies by leveraging deep analyst expertise to identify firms with strong growth potential, especially in a climate of rising equity uncertainty [1][4] Investment Opportunities - The biotechnology sector has evolved significantly since the mapping of the human genome, with four major modalities—gene therapy, gene editing, oligonucleotide therapies, and targeted protein degradation—driving new drug discoveries [2][3] - Rate cuts facilitate easier borrowing for R&D funding, which is crucial before drug revenues materialize, and also stimulate M&A activity that benefits biotech investments [4] Performance Metrics - The S&P Biotechnology Select Industry Index experienced a decline of approximately 10% in its trailing 12-month value as of June 30, yet the top 10 firms within the index achieved average returns of 145% [4] - Active healthcare and biotech ETFs, such as the T. Rowe Price Health Care ETF (TMED), focus on high-performing companies while avoiding underperformers, charging a fee of 44 basis points [4]

Core Viewpoint - T. Rowe Price has launched three new active transparent equity ETFs, expanding its lineup to a total of 22 offerings, aimed at providing long-term capital appreciation through sector-specific investments [1][2][4]. Group 1: New ETF Launches - The newly launched ETFs are T. Rowe Price Financials ETF (TFNS), T. Rowe Price Health Care ETF (TMED), and T. Rowe Price Natural Resources ETF (TURF) [1][2]. - Each ETF has an expense ratio of 0.44% and seeks to invest at least 80% of its net assets in their respective sectors [2][3][4]. Group 2: Investment Strategies - TFNS focuses on the financial services industry, typically maintaining a portfolio of 50-70 companies [2]. - TMED targets health care innovations, with a diversified portfolio of 100 to 150 stocks across biotechnology, pharmaceuticals, and health care services [3]. - TURF invests in natural resource companies, primarily in energy, minerals, and agriculture, holding 60-80 securities globally [4]. Group 3: Company Background - T. Rowe Price, founded in 1937, manages USD $1.62 trillion in assets as of May 31, 2025, and is known for its investment excellence and active management approach [5]. - The firm has a commitment to growing its active ETF business and aims to deliver compelling investment ideas through rigorous global research [5].