In a growing landscape of active ETFs, investors may be searching for strategies that stand out. The active SMIDcap ETF TMSL may be one such candidate. Amid growing interest in SMIDcap stocks, the strategy could play an important role for investors. It recently crossed an important AUM threshold, exceeding $100 million. That may suggest some potent AUM momentum and invite investors to take a closer look at the strategy.
See more: 3 Standout Small/Midcap Stocks in Active ETF TMSL
The T. Rowe Price Small-Mid Cap ETF (TMSL) charges 55 basis points for its approach. The strategy looks for small and midcap U.S. firms across the spectrum of both growth and value. The fund assesses individual stocks based on fundamental information like profitability, stability, earnings, and more.
An Active SMIDCap ETF Approach
An active approach to SMIDcap stocks can often outperform passive approaches thanks to the close scrutiny active managers apply. Where a passive strategy typically tracks index holdings, an active strategy takes a closer look, assessing factors like those in TMSL. For smaller and midcap firms, that can really matter. It can help uncover potential gems, while also screening out companies with potential issues.
In a somewhat top-heavy market, that could really play an important role. An active SMIDcap ETF could provide an important source of diversification for an overall portfolio. The active aspect already adds one layer of diversification beyond typical passive core exposures. At the same time, exposure away from large-cap firms can help too.
TMSL recently surpassed $100 million, now sitting at $105.3 million. The strategy has returned 25.63% since it launched, per T. Rowe Price data (based on NAV on 3/31/24). Taken together, the fund may appeal to investors looking to freshen up their portfolios with a new active exposure.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
