T. Rowe Price debuts its first fixed income ETFs

Oct 4th, 2021 | By | Category: Fixed Income

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T. Rowe Price has launched a trio of actively managed bond ETFs on NYSE Arca, marking the Baltimore-headquartered investment giant’s first foray into fixed income ETFs.

Andy McCormick, Head of Fixed Income at T. Rowe Price

Andy McCormick, Head of Fixed Income at T. Rowe Price.

The three ETFs replicate core portfolio strategies, including US aggregate, unconstrained, and ultra-short investment approaches, which are already offered through existing mutual funds collectively housing $7.5 billion in assets.

Andy McCormick, Head of Fixed Income at T. Rowe Price, said: “These three new offerings will reflect the time-tested and alpha-seeking approach that characterizes T. Rowe Price’s fixed income management. Reinforced by the best ideas of our global research team and their combined decades of strategic investing expertise, these core fixed income strategies present attractive options to investors who prefer the ETF format.”

Tim Coyne, Head of ETFs at T. Rowe Price, added: “With the latest addition of fixed income ETFs to our suite of active ETF offerings, investors now have access to a wider selection of T. Rowe Price investment strategies in whichever product format best fits their needs. We’re pleased to continue to grow our ETF capabilities now across both the equity and fixed income asset classes with strategies that have demonstrated success and strong client interest.”

The funds

The T. Rowe Price QM US Bond ETF (TAGG US) invests in the US dollar-denominated investment-grade bond market, selecting securities from multiple sectors including Treasuries, corporate bonds and securitized debt. The fund maintains key benchmark traits relative to the Bloomberg US Aggregate Bond Index while utilizing a modest tracking error budget in a bid to outperform.

The ETF is managed by Robert Larkins, Head of Quantitative Portfolio Management, who has 18 years of investment experience, all at T. Rowe Price.

The fund comes with an expense ratio of 0.08%.

The T. Rowe Price Total Return ETF (TOTR US) invests in a diversified portfolio of bonds and other debt instruments to generate income with a secondary objective of capital appreciation. The fund has considerable flexibility in seeking strong returns and its portfolio is constructed with a goal of being able to respond to a wide variety of market conditions.

The ETF is co-managed by Chris Brown, Head of Securitized Products, who has 21 years of investment experience, 16 of which have been at T. Rowe Price, and Anna Dreyer, Head of Risk and Portfolio Construction Research, who has 12 years of investment experience, all at T. Rowe Price.

The fund comes with an expense ratio of 0.31%.

The T. Rowe Price Ultra Short-Term Bond ETF (TBUX US) broadly diversifies across shorter-term government, investment-grade corporate, and securitized bonds. The fund seeks to provide a high level of income while minimizing principal volatility.

The ETF is managed by Alex Obaza, Executive Vice President of Short-Term Bond Funds, who has 16 years of investment experience, 13 of which have been at T. Rowe Price.

The fund comes with an expense ratio of 0.17%.

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