Exchange-Traded Funds

Active ETFs Designed to Outperform

Key Insights

  • T. Rowe Price Active ETFs benefit from the same investment management expertise that our actively managed funds do, as well as the advantages that an ETF structure provides.
  • Unlike passive strategies, active management has the ability to adapt to changing market environments.
  • We offer ETFs modeling our popular flagship equity and fixed income strategies.

T. Rowe Price active strategies have a compelling long-term track record. Regardless of the market environment, we seek to deliver strong performance through our commitment to fundamental research and in-depth insight. T. Rowe Price Active ETFs offer investors the benefits of exchange-traded funds (ETFs) they may prefer, while also offering the potential for outperformance they deserve.

The Popular Benefits of ETFs:
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Convenience

ETFs give investors the flexibility to buy or sell intraday without trading frequency limitations or minimum investment amounts.

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Cost Effectiveness

ETFs expenses are streamlined with fewer operational costs.

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Tax Efficiency

The ETF structure has the potential to reduce capital gain distributions by minimizing the impact of shareholder purchase and redemption activity.

ETFs Designed to Outperform

With passive investment strategies, investors are at the whim of the market. Whether a passive investment is tied to a specific sector or broad market index, by definition, there is no objective to outperform. And in market downturns, passively managed ETFs have no discretion to make adjustments.

On the other hand, actively managed investment strategies are able to adapt to changing market environments in pursuit of more attractive risk-adjusted returns. T. Rowe Price Active ETFs seek to outperform benchmark indexes through the added value of our investment management expertise and global research capabilities. Regardless of market conditions, our experienced investment professionals have the flexibility to adjust their actively managed portfolios in pursuit of the most advantageous positions. None of this is possible with the traditional limitations of passively managed ETFs.

T. Rowe Price’s Active ETFs build upon a tradition of innovation. We have long believed that we could deliver the benefits of our core investment approach—in-depth fundamental research and a strategic perspective—in the form of an ETF. Active ETFs are the latest vehicle that enables us to package this expertise for clients who may prefer the ETF structure.

A Proprietary Process That Helps Investors

Many ETFs publish a daily list of their full holdings - information that is used to accommodate the institutional investors known as authorized participants and market makers who help to maintain orderly market prices. With index-based strategies, the display of daily holdings may be irrelevant since most index holdings are already widely known.

In the best interests of shareholders, active investment managers typically keep their holdings and real-time trading activity confidential. This is done to prevent outside investors and competitors from using the information in a way that may be detrimental to performance.

At T. Rowe Price, we developed a proprietary process that safeguards the confidentiality of our daily investment decisions while still allowing for accurate pricing of our active equity ETFs without disrupting the existing ETF market process.

Our Commitment

Our decision to begin offering these new solutions reflects our ongoing desire to meet the ever-changing needs of investors. For clients seeking returns that go beyond the limitations of an index, T. Rowe Price is committed to offering a different kind of ETF: one that combines the control of ETF investing with the additional edge our strategic investing approach can deliver. We will continue to pursue innovative investment solutions and strategies to help clients feel confident in reaching their investing goals.

Learn more about T. Rowe Price equity and fixed income ETFs.

This ETF is different from traditional ETFs

Traditional ETFs tell the public what assets they hold each day.  This ETF will not.  This may create additional risks for your investment.  

For example:

  • You may have to pay more money to trade the ETF’s shares. This ETF will provide less information to traders, who tend to charge more for trades when they have less information.
  • The price you pay to buy ETF shares on an exchange may not match the value of the ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for this ETF compared to other ETFs because it provides less information to traders.
  • These additional risks may be even greater in bad or uncertain market conditions.
  • The ETF will publish on its website each day a "Proxy Portfolio" designed to help trading in shares of the ETF. While the Proxy Portfolio includes some of the ETF’s holdings, it is not the ETF’s actual portfolio.

The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF secret, this ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF’s performance. If other traders are able to copy or predict the ETF’s investment strategy, however, this may hurt the ETF’s performance.

For additional information regarding the unique attributes and risks of the ETF, see the prospectus.

Download a prospectus

Consider the investment objectives, risks, and charges and expenses carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information, call 1-877-561-7670 or select the prospectus link above. Read it carefully.

T. Rowe Price active equity ETFs publish a daily Proxy Portfolio, a basket of securities designed to closely track the daily performance of the actual portfolio holdings. While the Proxy Portfolio includes some of the ETF’s holdings, it is not the actual portfolio. Daily portfolio statistics will be provided as an indication of the similarities and differences between the Proxy Portfolio and the actual holdings. The Proxy Portfolio and other metrics, including Portfolio Overlap, are intended to provide investors and traders with enough information to encourage transactions that help keep the ETF’s market price close to its NAV. There is a risk that market prices will differ from the NAV. ETFs trading on the basis of a Proxy Portfolio may trade at a wider bid/ask spread than shares of ETFs that publish their portfolios on a daily basis, especially during periods of market disruption or volatility, and, therefore, may cost investors more to trade. The ETF’s daily Proxy Portfolio, Portfolio Overlap, and other tracking data are available at troweprice.com.

Although the ETF seeks to benefit from keeping its portfolio information confidential, others may attempt to use publicly available information to identify the ETF’s investment and trading strategy. If successful, these trading practices may have the potential to reduce the efficiency and performance of the ETF.

ETFs are bought and sold at market prices, not NAV. Investors generally incur the cost of the spread between the prices at which shares are bought and sold. Buying and selling shares may result in brokerage commissions, which will reduce returns.

This material is provided for general and educational purposes only. This material does not provide recommendations concerning investments, investment strategies, or account types. It is not individualized to the needs of any specific investor and not intended to suggest any particular investment action is appropriate for you nor is it intended to serve as the primary basis for investment decision-making. T. Rowe Price Investment Services, Inc., its affiliates, and its associates do not provide legal or tax advice. Any tax-related discussion contained in this material is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any tax penalties or (ii) promoting, marketing, or recommending to any other party any transaction or matter addressed herein. Please consult your independent legal counsel and/or tax professional regarding any legal or tax issues raised in this material.

Risk Considerations: All investments are subject to market risk, including the possible loss of principal. Active investing may have higher costs than passive investing and may underperform the broad market or passive peers with similar objectives. Passive investing may lag the performance of actively managed peers as holdings are not reallocated based on changes in market conditions or outlooks on specific securities.

202301-2698409

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