The critical added value of Active Management


Over the past five years, actively managed exchange-traded funds have been on the rise for quite some time. Although active ETFs are a relatively small part of most portfolios, it is impossible to ignore the growing popularity of active management in terms of strategies launched, assets raised and investor appetite.

According to the New York Stock Exchange active mid-year ETFs outlook, assets in assets ETFs The market hit $302 billion as of June 30, while actively managed ETF cash flow was $41.9 billion for the first half of 2022.

In an interview with NYSEJonathan Spiegel, director of ETFs product development at IndexIQ, cited “a number of reasons” why he believed “active management adds value.”

“At the heart of it, active management offers investors the ability to outperform a benchmark,” Spiegel said, adding that “active management gives investment managers the flexibility to adjust their approach when things may change. or not work”.

Spiegel explained, “Part of this flexibility is driven by a risk management framework that accompanies the active investment approach.”

Another benefit of active management, according to Spiegel, is “the ability to allocate more funds to higher conviction investments.”

“Unlike a traditional market cap-weighted, passively managed market ETFs, actively managed ETFs can choose how much to invest in a particular company,” Spiegel said. “And let’s not forget that all of this is done in the ETFs structure, which can provide tax efficiency and intraday liquidity.

For investors who want to add active management to their portfolios, T. Rowe Price offers a suite of actively managed equity ETFsincluding the Growth of T. Rowe Price Blue Chips ETFs (TCHP C+)the T. Rowe Price Dividend Growth ETFs (TDVG B)the T. Rowe Price Equity Income ETFs (TEQI B)the T. Rowe’s Price Growth Action ETFs (TGRW VS)and the T. Rowe Price US Equity Research ETFs (ATSP VS). T. Rowe Price has been in the investment industry for over 80 years conducting hands-on research with companies, utilizing risk management and employing a host of experienced portfolio managers averaging 22 years of experience .

For more news, insights and strategy, visit our Active ETFs Channel.


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