September 2021

One of the big problems today is that many investors have turned completely to indexing or passive investing. There is nothing wrong with buying a vehicle like the SPDR S&P 500 AND F Confidence (TO SPY) Where iShares Russell 3000 AND F (IWV). They can form large grassroots farms.

But they’re not perfect either. With indexing, you get both the good and the bad. Investors are subject to the general vagaries of the market, and this includes volatility shocks and shocks. Because of the way most indices are weighted by market capitalization, a few stocks can significantly influence their direction and price movements.

But active management can work differently.

On the one hand, active managers do not have to buy all the stocks in an index or in the same weightings as their benchmark index. It can help reduce volatility. Second, active managers can focus more on dividends. Dividends have long been a great way to reduce overall portfolio volatility. After all, getting 2-4% in cash goes a long way in increasing yields.

One of the advantages of active management over passive management is probably the possibility of not being 100% invested at all times. Active managers have the flexibility to sell stocks as they see fit and flee to cash if they feel volatility is too high or valuations are too high. However, this is not the case with passive indexing. An index fund will hold all of its benchmark holdings even if stocks rebound or trade with triple-digit P / E’s. This ability to hold cash can be a great way for active managers to reduce losses and improve returns for their shareholders.

A recent NAAIM One study highlights this factor and calls it the “buy and hold equalizer”. Looking at 70 years of market data, active managers can actually be on the wrong side of the market almost 40% of the time and still equal buy and hold returns. Indeed, the ability to flee towards liquidity creates a leverage effect during bull markets. Conversely, the remaining 60% who succeed end up outperforming during times of high volatility.

With stocks going back and forth, this is a time when active management really shines, as active managers are able to exit distressed investments with agility and potentially transfer funds to safer ones, while that passive funds face a roller coaster ride until their next rebalancing.

Adviser Investment Management chairman Daniel Wiener, recently appearing on CNBC AND F Edge believes this is the time when investors “have to work with investment managers, portfolio managers with boots on the ground.”

Active managers are able to react in real time to potential market meltdowns in a way that could save investors a lot of money. Periods of volatility are historically when active management really comes to the fore and outperforms the benchmark and passive peers.

Troubled markets for international investors, along with downturns in US markets, provide actively managed funds the perfect opportunity to showcase their strengths.

Long term, DWS Arne Noack of the group said AND F Edge that he doesn’t think Evergrande’s default is one that will create far-reaching effects in the markets at large.

“Evergrande being a struggling development company obviously concerns us, but we don’t see it as a larger systemic risk in China,” Noack said.

T. Rowe Price in difference and the benefits of active investing and active management. The company currently offers five actively managed ETFs for investors looking to invest in a record IPO environment that benefits stock pickers. The company brings a wealth of experience and research to its products, with portfolio managers averaging over 20 years of investment each, as well as more than 400 investment professionals dedicated to researching companies within ETFs.

For more news, information and strategies, visit the Active site AND F Channel.

The demise of China’s largest real estate developer and its potential effect on the Chinese economy has added stress to already volatile markets. Previous Chinese government regulations in several sectors as well as Delta hampering China’s economic recovery have already created downside in the markets, and now, with the addition of Evergrande’s default on billions of dollars in debt, Chinese markets and investments in China are shaken.

With stocks going back and forth, this is a time when active management really shines, as active managers are able to nimbly exit troubled investments and potentially shift funds to safer ones, while that passive funds face a roller coaster ride until their next rebalancing.

Adviser Investment Management chairman Daniel Wiener, who recently appeared on CNBC’s ETF Edge, believes the time has come for investors “to work with investment managers, portfolio managers with boots on the ground.”

Active managers are able to react in real time to potential market meltdowns in a way that could save investors a lot of money. Periods of volatility are historically when active management really comes to the fore and outperforms the benchmark and passive peers.

Troubled markets for international investors, along with downturns in US markets, provide actively managed funds the perfect opportunity to showcase their strengths.

Long term, Arne Noack of DWS Group told ETF Edge he doesn’t think Evergrande’s default is one that will create far-reaching effects in the wider markets.

“Evergrande being a struggling development company obviously concerns us, but we don’t see it as a larger systemic risk in China,” Noack said.

T. Rowe Price believes in the difference and benefits of active investing and active management. The company currently offers five actively managed ETFs for investors looking to invest in a record IPO environment that benefits stock pickers. The company brings a wealth of experience and research to its products, with portfolio managers averaging over 20 years of investment each, as well as more than 400 investment professionals dedicated to researching companies within ETFs.

For more news, information and strategy, visit Active ETF Channel.

It’s a concern that causes advisers to divert funds overwhelmingly to actively managed funds, Wealth Professionals reports.

“With the current cycle moving very quickly, the risk that the correction will be hard increases,” Binky Chadha, chief strategist at Deutsche Bank, warned last week. “Market-level equity valuations are historically extreme on almost every measure. “

A new poll from PGIM Investments, part of the $ 1.5 trillion global investment management firm Prudential Financial, Inc., discovered that advisors had funneled 62% of their clients’ assets into active management and 34% in passive funds.

Fears of COVID the resurgence of the Delta variant and the looming specter of another economic shutdown have a huge impact on how advisers approach investing; 76% said pandemic concerns guide their decisions, and 68% said volatility in stock markets is their main concern for portfolio management.

“What we have discovered through our research and experience is that financial advisors continue to use a mix of assets and liabilities, but rely more on actively managed solutions within the portfolios of customers, ”said Stuart Parker, President and CEO of PGIM Investments. “The ability to generate alpha for clients, especially during times of market volatility, is critical.”

The study also found that while almost all financial advisors use mutual funds, 65% plan to use more ETFs in the next three years.

T. Rowe Price believes in the difference and the benefits of active management. The company currently offers five actively managed ETFs covering a variety of investment objectives. The company brings a wealth of experience and research to its products, with portfolio managers averaging over 20 years of investment each, as well as more than 400 investment professionals dedicated to researching companies within ETFs.

For more news, information and strategies, visit the Active site AND F Channel.

Market performance, fears of Delta’s global economic impact, and concerns about inflation are prompting investors and advisers to watch the markets closely for any signs of what many see as an inevitable correction. US markets have consistently outperformed for so long that there are growing fears of impending volatility and a significant correction is on the horizon.

It’s a concern that causes advisers to divert funds overwhelmingly to actively managed funds, Wealth Professionals reports.

“With the current cycle moving very quickly, the risk that the correction will be hard increases,” Binky Chadha, chief strategist at Deutsche Bank, warned last week. “Market-level equity valuations are historically extreme on almost every measure. “

New survey from PGIM Investments, part of the $ 1.5 trillion global investment management firm Prudential Financial, Inc., found advisers funneled 62% of their clients’ assets in active management and 34% in passive funds.

Fears of a COVID resurgence with the Delta variant and the looming specter of another economic shutdown have a huge impact on how advisers approach investing; 76% said pandemic concerns guide their decisions, and 68% said volatility in stock markets is their main concern for portfolio management.

“What we have discovered through our research and experience is that financial advisors continue to use a mix of assets and liabilities, but rely more on actively managed solutions within the portfolios of clients, ”said Stuart Parker, President and CEO of PGIM Investments. . “The ability to generate alpha for clients, especially during times of market volatility, is critical.”

The study also found that while almost all financial advisors use mutual funds, 65% plan to use more ETFs in the next three years.

T. Rowe Price believes in the difference and the benefits of active management. The company currently offers five actively managed ETFs covering a variety of investment objectives. The company brings a wealth of experience and research to its products, with portfolio managers averaging over 20 years of investment each, as well as more than 400 investment professionals dedicated to researching companies within ETFs.

For more news, information and strategy, visit Active ETF Channel.

PActive index ETFs help investors follow the markets, but they lack the ability to adjust their holdings according to changing market environments. How do you balance the need for exposure to core stocks without being left to the vagaries of the market?

In the next webcast, Strong Earnings, Strong Markets – Why Now is the Time to Be Active, Ken Uematsu, Associate Portfolio Manager, T. Rowe Price, will discuss how active management can beat passive management (without taking unnecessary risk).

T. Rowe Price offers four actively managed ETF strategies, including the T. Rowe Price Blue Chip Growth ETF (TCHP), T. Rowe Price Dividend Growth ETF (TDVG), T. Rowe Price Equity Income ETF (TEQI), T. Rowe Price Growth Equity ETF (TGRW) and the recently launched T. Rowe Price US Equity Research ETF (TSPA).

The T. Rowe Price Blue Chip Growth ETF seeks to provide long-term capital growth by investing in common stocks of high-quality large and medium-sized companies with the potential for above-average earnings growth.

The T. Rowe Price Dividend Growth ETF seeks dividend income and long-term capital growth by investing most of its assets in the common stocks of dividend-paying companies that are expected to increase their dividends over time.

T. Rowe Price Equity Income ETF seeks high dividend income and long-term capital growth by investing most of its assets in common stocks, with an emphasis on large-cap stocks that have a strong track record. dividend payments or which are deemed to be undervalued.

Finally, the T. Rowe Price Growth Stock ETF seeks long-term capital growth and invests in companies that exhibit one or more of the following: superior growth in earnings and cash flow, the ability to maintain momentum in profits even in times of economic downturn, the occupation of a lucrative niche in the economy and the ability to expand even in times of low economic growth.

Constructed in the same way as the flagship investment strategies that have served T. Rowe Price clients well for decades, active ETFs use the same portfolio managers as their corresponding mutual funds and employ the investment approach. The company’s long-standing strategic investment, characterized by rigorous research, risk awareness, and independent decision-making.

T. Rowe Price Active ETFs complement the company’s traditional mutual fund offerings and offer the key features associated with existing ETFs that some investors may prefer, including ongoing daily trading, real-time market-determined prices, and tax efficiency. Over time, T. Rowe Price plans to offer a strong portfolio of ETF products covering investments in various asset classes.

The T. Rowe Price US Equity Research ETF’s strategy maintains similar style and sector exposures to the S&P 500, but uses an active approach to stock selection, seeking to add value from the “best ideas” of research. on the shares of T. Rowe Price. analysts. The US Equity Research ETF is similar to T. Rowe Price’s US Equity Research Fund (PRCOX), with which it shares the same experienced portfolio management team comprising the company’s equity research directors for North America. .

T. Rowe Price Active ETFs also have a proprietary portfolio disclosure process that ensures market makers have enough information to quote prices with a high degree of confidence while simultaneously protecting the intellectual property of professionals. the company’s investment and the interests of its mutual fund shareholders. The proprietary, non-transparent, actively managed ETF wrapper may also attract more fund managers to the ETF space, providing active managers with a way to reap the benefits of the ETF’s investment structure while protecting their secret sauce from the ETFs. potential favorites.

Financial advisors who want to learn more about an active approach to investing can register for the Thursday, September 16 webcast here.

Learn more at ETFtrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.