In my former life as a mutual fund analyst, T. Rowe Price was always a staple of my research. Back then, the focus was on their fundamentally focused active mutual fund lineup. However, in the last 15 years, the investment world — and my own research focus — has moved toward ETFs. I watched with strong interest as this Baltimore-based firm brought its active management expertise into the ETF world in 2020.
Fast forward to today, T. Rowe Price’s ETF suite has officially crossed $25 billion in assets. I believe this remarkable achievement reflects a deliberate effort to lean into the wrapper and educate long-time mutual fund investors about the structural benefits of ETFs. Advisors and investors have increasingly gained comfort with the firm’s lineup.
“Reaching $25 billion in AUM is a milestone made possible by the trust our clients place in T. Rowe Price and our active ETF capabilities,” said Tim Coyne, global head of ETFs at T. Rowe Price. “We’re grateful for that confidence, and we remain focused on innovating and delivering actively managed solutions designed to support our clients’ long‑term goals.”
Anchored in Fundamental Security Selection
Actively managed ETF assets have soared industrywide over the last five years. While much of that demand has centered on the surge of options-based and systematic products from firms like JPMorgan and Dimensional, T. Rowe Price’s success has primarily been anchored in the same thing that made them a leader in the mutual fund world: fundamental security selection.
The firm has found a niche with options-based strategies, such as the $280 million T. Rowe Price Capital Appreciation Premium Income ETF (TCAL). However, the lion’s share of assets has come from their fundamental core.
Broad Success Across Styles & Asset Classes
The $7.0 billion T. Rowe Price Capital Appreciation Equity ETF (TCAF) has quickly become a go-to for advisors seeking a growth ETF despite being just under three years old. Yet the breadth of the firm’s success extends across other investment styles. We are seeing strong traction in other fundamental equity plays like the $2.0 billion T. Rowe Price Small-Mid Cap ETF (TMSL) and the $1.4 billion T. Rowe Price International Equity ETF (TOUS).
Furthermore, it isn’t just an equity story; their fixed income development efforts are also bearing fruit. The $1.9 billion T. Rowe Price QM U.S. Bond ETF (TAGG) has seen notable growth, proving that advisors trust T. Rowe’s active approach to navigate the challenges of the fixed income market. Overall, nine of the firm’s ETFs now manage more than $1 billion in assets, with another five crossing the $500 million mark.
Expanding the Toolkit Beyond GICS
It has been exciting to see the firm’s recent product development focused on more targeted sector strategies from a fundamental perspective. The T. Rowe Price Technology ETF (TTEQ) is a good example. What makes the $205 million TTEQ particularly notable is how it goes beyond rigid GICS (Global Industry Classification Standard) definitions. While many investors consider Alphabet and Amazon as leading technology companies, popular index-based tech ETFs often exclude them based on the GICS rules. T. Rowe uses its active discretion to build TTEQ with tech heavyweights that extend beyond the standard Apple, Microsoft, and NVIDIA trio.
The New Era of Active Models
T. Rowe Price is not the only old school active manager finding its stride in the ETF world. Peers like Capital Group and Fidelity have also seen assets climb as advisors incorporate their offerings into model portfolios.
Ultimately, the success of these firms proves that trusted brands and deep research teams remain a key differentiator. When fundamental products can pass the rigors of modern due diligence while offering the tax efficiency and liquidity of an ETF, advisors and investors win. Congratulations to the T. Rowe Price team on the first $25 billion; I suspect the next $25 billion will arrive even faster.
Originally published on ETF Trends
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