Market Volatility is Back (If it Ever Left)

While stocks rallied after a positive inflation report and the midterm elections, that old standby, market volatility, has returned — almost as if it never left.

Markets were mixed on Monday amid fears that China may bring back strict Covid restrictions. While the Dow Jones Industrial Average rose 12 points, or 0.04%, the S&P 500 dropped 0.29% and the Nasdaq Composite fell 0.94%. This is after markets enjoyed an extended rally earlier this month after the latest consumer price index report showed that inflation had cooled in October.

“That puts a dent in the global economic recovery story that we were hoping would be ushered in with a reopening in China,” Art Hogan, chief market strategist at B. Riley Financial, told CNBC.

The S&P 500 is down nearly 18% year-to-date.

With market volatility continuing to sink its teeth into markets, ETF issuers are launching more actively managed funds as more investors accept the benefits of the ETF wrapper. Plus, amidst a high volume of market volatility and record-high inflation, investors are also seeking active management to guide their investments.

While passive strategies lack the flexibility to adapt to changing market environments, active ETFs can offer the potential to outperform benchmarks and indexes. Plus, active managers with greater resources and greater scope benefit from economies of scale, which can often translate to better returns.

As part of its lineup of active exchange traded funds, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP)said T. Rowe Price Dividend Growth ETF (TDVG)said T. Rowe Price Equity Income ETF (TEQI)said T. Rowe Price Growth Stock ETF (TGRW)and the T. Rowe Price US Equity Research ETF (TSPA).

Neil E. Kays, senior product marketing manager at T. Rowe Price, explained that if passive management is like “putting your car on autopilot,” then active management is giving the manager “the ability to grab the wheel.”

“In the current market environment, having an active manager that can pivot is key,” Kays added.

T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.

For more news, information, and analysis, visit the Active ETF Channel.

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