T. Rowe Price Value ETF (TVAL US) – Portfolio Construction Methodology

The investment process governing the actively managed T. Rowe Price Value ETF seeks long-term capital growth by investing primarily in US equity securities using a fundamental value approach. The strategy typically holds a diversified portfolio of large-capitalisation companies, with flexibility to own mid-cap names, and focuses on businesses that appear undervalued on measures such as price-to-earnings, price-to-book, price-to-cash-flow, dividend yield and estimates of intrinsic value relative to underlying fundamentals. Research analysts and portfolio managers conduct bottom-up company assessments, evaluating competitive position, management quality, balance sheet strength, cash-flow durability and capital-allocation discipline, while incorporating scenario analysis around revenues, margins and reinvestment opportunities. Portfolio construction emphasises stock-specific ideas over sector or factor bets, with position sizes reflecting conviction, liquidity and risk contribution within diversification guidelines. Sell and trim decisions are driven by valuation normalisation, a weakening investment thesis, deteriorating fundamentals or better risk-adjusted opportunities elsewhere in the universe.

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