T. Rowe Price rolls out actively managed US large-cap equity ETF

Jun 16th, 2021 | By | Category: Equities

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T. Rowe Price has added to its lineup of actively managed ETFs with the launch of the T. Rowe Price US Equity Research ETF (TSPA US).

Ann Holcomb, CFA, Director of Research, North America and co-portfolio manager

Ann Holcomb, CFA, Co-Portfolio Manager & Director of Research, North America, T. Rowe Price.

Listed on NYSE Arca, it is the firm’s fifth strategy in an active ETF wrapper.

The fund is constructed similarly to its mutual fund counterpart, the T. Rowe Price US Equity Research Fund, with which it shares the same portfolio management team.

The strategy maintains style and sector exposures similar to the S&P 500, but uses an active “best ideas” approach to stock selection, seeking to add value over the S&P 500 over time through long-term capital growth.

It is managed by directors of equity research for North America, including Ann Holcomb, Jason Polun, and Josh Nelson, who average more than 15 years in investment experience at T. Rowe Price.

The strategy is likely to be deployed by investors as a core portfolio building block and an active, or enhanced index, alternative to regular vanilla S&P 500 ETFs with the possibility of incremental upside performance.

The fund comes with a net expense ratio of 0.34%

Ann Holcomb, CFA, Director of Research, North America at T. Rowe Price and co-portfolio manager of the fund, said: “The US Equity Research ETF will be characterized by rigorous and comprehensive research conducted by T. Rowe Price’s extensive team of equity analysts. We will use their best ideas and our strategic, risk-aware investing approach to craft a portfolio that seeks to perform better than the S&P 500 for shareholders.”

Tim Coyne, Head of Exchange-Traded Funds, T. Rowe Price, added: “TSPA is a welcome addition in our long-term plan to build a robust active ETF suite that continues to deliver increased investment choice for clients. This strategy’s pursuit of alpha powered by T. Rowe Price active management offers an additional option in our thoughtfully designed lineup of active ETFs.”

Proprietary process

All T. Rowe Price active ETFs feature a proprietary portfolio disclosure process that ensures market makers have enough information to quote prices with a high degree of confidence, while also protecting the intellectual property of the firm’s investment insights and the interests of its mutual fund shareholders.

The Baltimore-headquartered asset manager launched its first active ETFs in August 2020, which included four funds – the T. Rowe Price Blue Chip Growth ETF (TCHP US), the T. Rowe Price Dividend Growth ETF (TDVG US), the T. Rowe Price Equity Income ETF (TEQI US), and the T. Rowe Price Growth Stock ETF (TGRW US) – each constructed similarly to its corresponding flagship investment strategies.

The collective lineup of active ETFs complements the firm’s traditional mutual fund offerings while delivering certain features associated with existing ETFs that some investors may prefer, such as continuous daily trading and real-time market-determined pricing.

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