Last updated: 09:43 / Tuesday, 14 July 2020
With SEC's Approval

T. Rowe Price Will Launch Four Active Equity ETFs

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  • The products will include the Blue Chip Growth ETF, the Dividend Growth ETF, the Equity Income ETF, and the Growth Stock ETF
  • The ETFs will use the same investment strategies and portfolio managers as their corresponding mutual funds and will diversify and complement them
  • “We have reached a significant milestone that will enable us to bring T. Rowe Price’s time-tested investment management capabilities to the ETF marketplace”

The U.S. Securities & Exchange Commission (SEC) has granted the remaining approvals necessary for T.Rowe Price to bring to market four active exchange-traded funds (ETFs). The firm announced in a press release that they will be listed on NYSE Arca.

“These latest milestones clear the path for T. Rowe Price to introduce ETFs in an active management format that has characterized the firm’s investment approach for more than 80 years”, they said. The products will include the Blue Chip Growth ETF, the Dividend Growth ETF, the Equity Income ETF, and the Growth Stock ETF.

T. Rowe Price stated that the ETFs –which will just be available in the US- will use the same investment strategies and portfolio managers as their corresponding mutual funds. They will diversify and complement them for investors who prefer the intraday trading, tax efficiency, and cost structure ETFs provide. However, the firm believes mutual funds will remain a “key vehicle” for many investors.

“We have reached a significant milestone that will enable us to bring T. Rowe Price’s time-tested investment management capabilities to the ETF marketplace. When launched, these ETFs will be the only ones in the market informed by T. Rowe Price’s strategic investing approach and supported by our global research platform of more than 600 investment professionals”, said Rob Sharps, Group Chief Investment Officer.

T. Rowe Price’s active ETFs will feature a proprietary portfolio disclosure process that will ensure market makers have enough information to quote prices with a high degree of confidence, while it also protects the intellectual property of the firm’s investment professionals and the interests of its funds shareholders.

Over time, the firm plans to deliver a robust ETF product lineup covering investments in various asset classes and to offer its active ETF model to other asset managers interested in bringing their own active ETFs to market.

Tim Coyne, Head of Exchange-Traded Funds, pointed out that, today, active ETFs from the company are a step closer to reality. “As the ETF industry evolves to include active ETFs, T. Rowe Price is on the path to deliver flagship investment strategies in this new way. We believe that financial advisors and investors seeking the benefits of the ETF structure will find these to be compelling as we work to deliver quality offerings that meet a range of needs.”

T. Rowe Price has been engaged in communication with the SEC about the potential launch of semitransparent active ETFs for several years, having initiated dialogue in 2010 and submitted its first private filing in 2011. The firm anticipates launching its active ETFs this year.

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