T. Rowe Price Launches 5 New Active ETFs

Rowe Price launched five new actively managed stock exchange-traded funds on Thursday, a departure from its previous five active nontransparent ETFs.

The new funds are:

The firm launched its first ETFs in August 2020, offering five active nontransparent ETFs, commonly called ANTs or semitransparent ETFs, based on some of its most popular mutual funds.

Rowe’s Head of ETFs Tim Coyne told etf.com that a major reason for the semitransparent structure was to protect the intellectual property of its funds, and to stop front-running of the fund’s trades.

Despite its $1.3 trillion in total assets under management, prior to the launch of these new funds, T. Rowe only had $1 billion in AUM across 10 ETFs including five other transparent bond ETFs.

This mirrors the troubles of semitransparent ETFs overall, which have only $4 billion in assets versus $364 billion in active ETFs broadly, according to Bloomberg. Eric Balchunas, ETF analyst for Bloomberg, went as far as saying this week that ANTs will “slowly go extinct.”

Coyne said the new ETFs are not a response to this lack of uptake on ANTs. “We’re happy to have crossed the $1 billion mark given our time on the market and the fact that the semitransparent structure isn’t offered by all platforms,” he noted.

Instead, T. Rowe said this represents a new response to customer demands, whereas the previous ETFs were meant to give exposure to existing mutual funds in an ETF package. These new funds offer strategies designed for ETFs.

The latest ETFs have some of the same management as existing T. Rowe mutual funds, with David Giroux as head portfolio manager for both TCAF and T. Rowe’s Capital Appreciation Fund. Jodi Love, the lead portfolio manager on some of T. Rowe’s other mutual funds, is also manager for TGRT, TOUS, TMSL, and TVAL. Despite the similarity in management and name, Coyne says that fund management is a “team approach” even if the head manager is the same.

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The new funds have expense ratios ranging from 0.31% to 0.55%, significantly below the 0.7% average for active funds, as well as T. Rowe’s previous active ETFs.

Contact Gabe Alpert at [email protected]

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