Revving Up New Investment Vehicles for Our Clients

Combining rigorous research with putting clients first is the engine that has powered our business at T. Rowe Price for nearly nine decades. It has propelled us into being one of the world’s largest and most trusted asset managers while giving us the privilege of serving clients who seek superior, long‑term investment results.

You could say that we’ve put that engine in various “vehicles” over the years, beginning in 1937 with what today would be called “separately managed accounts” for individuals. In 1950, we opened our first mutual fund and welcomed our first institutional clients, and, in 1974, we led the industry by introducing our first company‑sponsored defined contribution plan. Quantitative funds and actively managed exchange‑traded funds (ETFs) are some of the most recent vehicles to join our lineup.

On June 15, we introduced fully transparent, actively managed ETFs—in other words, ETFs that are not designed to track an index. These five new equity ETFs leverage the capabilities of T. Rowe Price’s research analysts and the expertise of several of the firm’s most experienced portfolio managers.

Tim Coyne, T. Rowe Price’s global head of Exchange Traded Funds stresses that, unlike their semi‑transparent predecessors, the new, fully transparent equity ETFs represent new strategies and are not designed to be clones of their mutual fund counterparts. What they do share with our other ETFs, Tim notes, is the full support and backing of T. Rowe Price’s resources and experienced portfolio managers (PMs).

These distinct strategies are designed to provide investors a way to access a range of what Tim calls “building block” investment categories—large‑cap, small‑mid cap, value, growth, core, and international. Like their counterparts, these new ETFs provide a way for clients to access active management generally at a lower cost.

Lead Portfolio Manager Jodi Love likens the management approach behind the new strategies to an auto racing team. Just as a race car’s success relies on the efforts of its entire crew, these new investment vehicles are guided using a multilayered, team approach.

Working in consultation with the co‑portfolio managers, Jodi serves as lead manager of the Value, Growth, Small‑Mid Cap, and International Equity ETFs, where she oversees their daily operations. Jodi views her job as making sure the team is working efficiently and that each portfolio is operating at peak efficiency. As a result, she interacts with her co‑portfolio managers and seeks out necessary information from the firm’s other PMs and analysts.

Jodi uses a repeatable and disciplined portfolio management process that involves both qualitative and quantitative assessments of a potential holding. Her aim is to create funds with relatively low turnover and centered on a foundation of securities with the potential for long‑term price appreciation.

After graduating summa cum laude from McGill University in Montreal, Jodi started her investment career in 2004. She joined T. Rowe Price in 2019 as an investment analyst covering restaurants, branded apparel and footwear, and direct‑to‑consumer commerce.

Because the Capital Appreciation Equity ETF is managed by a separate investment adviser, T. Rowe Price Investment Management, Inc., David Giroux serves the role as its lead manager. More about David below.

Sitting behind the wheels of each of the five new ETFs are portfolio managers who also drive some of T. Rowe Price’s most prominent equity strategies.

Jodi and Tim stress the importance of the firm’s research platforms in fueling the performance of each of the new funds. As of March 31, 2023, TRPA employed 96 equity analysts and TRPIM employed 30, making for a combined total of 126. These professionals are tasked with knowing their coverage areas inside and out, and many of these analysts boast years of experience and extensive industry contacts. They cooperate in the search for investment opportunities with portfolio managers, economists, and other experts—making for an overall research team of 404 professionals (336 with TRPA and 68 with TRPIM).

As with our other funds and portfolios, our new transparent ETFs leverage the insights our equity analysts gain through careful fundamental research. We like to say that our analysts go “beyond the numbers” by meeting frequently with management teams, attending industry conferences, and visiting company facilities. A proprietary platform then allows our analysts to quickly share their insights with their peers within each investment adviser—unconstrained by asset class, investment style, or office location.

Finally, Tim might be described as the engineer who designs the tracks and equipment that allow T. Rowe Price ETFs to run efficiently. An industry veteran with extensive ETF experience, Tim came to T. Rowe Price in 2020 to lead our expansion into this business line. In 2021, Tim guided the launch of our first fixed income ETFs.

Tim has high conviction that the expansion of active management into ETFs has just begun. With 15 T. Rowe Price ETFs already “on the track,” he and his team are committed to developing a comprehensive suite of ETFs by expanding our ETF capabilities and offerings across asset classes.

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, visit troweprice.com.