T. Rowe launches its first transparent active equity ETFs

T. Rowe launches its first transparent active equity ETFs
The storied mutual fund complex was late to the exchange-traded fund game but has attracted $1 billion in ETF assets since launching its first suite of funds three years ago.
JUN 20, 2023

The ETF migration continues at T. Rowe Price, which has rolled out five transparent active strategies designed for core investment allocations.

The $1.3 trillion asset manager, which was one of the last mutual fund complexes to enter the exchange-traded fund space, joined the party three years ago with five semi-transparent equity ETFs and five fully transparent fixed-income ETFs.

Those ETFs now combine for more than $1 billion, which Tim Coyne, T. Rowe’s head of ETFs, considers a success.

“We’ve had consistent growth across all of our ETFs, even though the semi-transparent structure was new to the market,” he said. “We do feel, over time, that we will continue to gain broader adoption and continue to grow.”

The ETFs that launched last week include T. Rowe Price Capital Appreciation Equity ETF (TCAF), T. Rowe Price Growth ETF (TGRT), T. Rowe Price International Equity ETF (TOUS), T. Rowe Price Small-Mid Cap ETF (TMSL) and T. Rowe Price Value ETF (TVAL).

The funds have expense ratios of between 33 basis points and 55 basis points.

“What we’re trying to deliver is high-quality, stand-alone strategies that form the building blocks for advisor portfolios,” Coyne said. “These are major categories that open up opportunities for use in model portfolios.”

Unlike the original five semi-transparent equity ETFs, which were clones of long-standing mutual fund strategies, the new batch of fully transparent equity ETFs aren't versions of existing mutual fund strategies.

The distinction, Coyne said, is that fully transparent ETF portfolios could allow front running of the corresponding mutual funds.

He said that the latest launch is just the next step in T. Rowe’s move into the ETF space and that investors and advisors should expect the ETF lineup to continue to expand.

“When we launched our ETFs, it was basically us listening to clients,” Coyne said. “The profile of our client is changing, meaning their preferences changing. Increasingly they prefer ETFs as a vehicle of choice. We now have clients using both our mutual funds and ETFs in separate models.”

Latest News

Advisors weigh reputational risks, regulatory shifts in digital asset adoption
Advisors weigh reputational risks, regulatory shifts in digital asset adoption

Client sentiment and the regulatory climate may be getting sunnier, but fiduciary concerns are still holding three-fifths of surveyed advisors back from embracing crypto investments.

Citarell to spearhead Northeast sales growth for Easterly
Citarell to spearhead Northeast sales growth for Easterly

John Hancock veteran has more than 30 years of industry experience.

Hightower Advisors chief Oros to step down, Goldman Sachs 'lifer' is replacement
Hightower Advisors chief Oros to step down, Goldman Sachs 'lifer' is replacement

New leader takes over a firm that has seen remarkable transformation.

Why aren't investors celebrating stellar US earnings season?
Why aren't investors celebrating stellar US earnings season?

Tariffs, rates are overshadowing what should be a positive period.

Gold declines for second day following comments from Fed’s Powell
Gold declines for second day following comments from Fed’s Powell

Record rally for bullion is on hold for now as investors weigh outlook.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.