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Half a Billion in 1 Month: TSPA’s Active Take on the S&P 500 ETF

The active ETF space offers some notable advantages over passively managed index ETFs. Many investors look to S&P 500 ETF strategies as key building blocks in their portfolios. What they may not realize is that there are many active ETFs that can actually outperform those important S&P 500 ETF funds. The T. Rowe Price U.S. Equity Research ETF (TSPA B), for example, has added more than half a billion over just one month with its own approach to outperforming the market.Key Takeaways: The S&P 500 is a pillar of the investing landscape, with many investors looking to S&P 500 ETF offerings to get their exposure. Active strategies can act as a complement or outright replacement for the big index-tracking ETFs. TSPA’s use of fundamental research to aid its managers with that task could make it one to watch. TSPA charges a 34 basis point fee to invest, with a goal of outperforming the S&P 500 by leaning on the firm’s fundamental research capabilities. According to the firm’s site, the strategy looks to create a portfolio broadly similar to the S&P 500, but able to provide excess returns. Its managers look to overweight stocks compared to their weighting in the key index. Backed by a team of about 30 equity research analysts, the fund could make for an appealing option to outperform the S&P 500.  The fund has done well relative to some notable S&P 500 ETF alternatives, too. TSPA has outperformed the S&P 500 YTD, according to YCharts data. The ETF has also outperformed the S&P 500 over three years cumulatively, according to that same data. The strategy has also added more than half a billion in flows over the last month. Specifically, per ETF Database data, the fund has added $543 million in net inflows in that time.  What’s more, the active take on the S&P 500 is also sending a buy signal, according to its tech chart. The fund’s price currently sits above both its 50- and 200-day simple moving averages. As of June 11, the price for the ETF was $45.94, compared to the averages at $45.56 and $43.18, respectively. See more: T. Rowe Price Adds Active Dynamic Allocation ETF Managed by David Giroux What might the rest of the year hold, then, for the ETF? The fund’s active approach can help it mitigate potential risks to the AI revolution by underweighting tech stocks. Or, if the AI revolution just continues to pump those names higher, meeting the fund’s standards, it can weigh those stocks higher than the index. Overall, the fund could make for a solid core equity addition or replacement strategy for those already heavily exposed to the passive S&P 500. For more news, information, and analysis, visit our Active ETF Content Hub.

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