T. Rowe Price Receives Approval For Active Exchange-Traded Funds
T. Rowe Price(NASDAQ-GS: TROW) announced that the U.S. Securities & Exchange Commission(SEC) has granted the remaining approvals necessary for the firm to bring to market four active exchange-traded funds (ETFs), which will be listed on NYSE Arca, Inc.These latest milestones clear the path for T. Rowe Priceto introduce ETFs in an active management format that has characterized the firm's investment approach for more than 80 years.
- Constructed similarly to investment strategies that have served clients well for decades, the first
T. Rowe Priceactive ETFs will include the Blue Chip Growth ETF, the Dividend Growth ETF, the Equity Income ETF, and the Growth Stock ETF.
- The active ETFs will use the same investment strategies and portfolio managers as their corresponding mutual funds. While many existing ETFs track passive indexes, the
T. Rowe Priceactive ETFs will employ the firm's established strategic investing approach, characterized by rigorous research and risk awareness, and carried out by more than 600 investment professionals around the globe.
- ETFs will diversify and complement
T. Rowe Price'straditional mutual fund offerings for investors who prefer the intraday trading, tax efficiency, and cost structure ETFs provide. However, the firm believes mutual funds will remain a key vehicle for many investors.
T. Rowe Priceactive ETFs will offer the key features associated with existing ETFs, including continuous daily trading, real-time market determined pricing, and tax efficiency, but with the opportunity for investors to pursue returns in excess of market indexes. T. Rowe Price'sactive ETFs will feature a proprietary portfolio disclosure process that will ensure market makers have enough information to quote prices with a high degree of confidence, while it also protects the intellectual property of the firm's investment professionals and the interests of its funds shareholders.
- Over time,
T. Rowe Priceplans to deliver a robust ETF product lineup covering investments in various asset classes.
- Through strategic alliances,
T. Rowe Priceplans to offer its active ETF model to other asset managers interested in bringing their own active ETFs to market. T. Rowe Priceanticipates launching its active ETFs in 2020.
"By securing all of the necessary approvals for our active ETFs, we have reached a significant milestone that will enable us to bring
"Today, active ETFs from
"The pending launch of our active ETFs gives us a new way to meet investors' evolving needs while still tapping the investment expertise of a skilled and experienced portfolio management team, which across the firm has an average of 22 years of industry experience, including 17 years with
"We know that one size doesn't fit all for investors, so the new active ETFs will complement
T. ROWE PRICE ETFS' PATH TO APPROVAL
T. Rowe Pricehas been engaged in constructive communication with the SECabout the potential launch of semitransparent active ETFs for several years, having initiated dialogue in 2010 and submitted its first private filing in 2011.
- In 2013,
T. Rowe Priceapplied to the SECfor exemptive relief to bring to market actively managed equity ETFs with a less frequent holdings disclosure policy than what is currently required for transparent ETFs.
- Since that application,
T. Rowe Pricehas had constructive dialogue with the SEC, resulting in the amendment of their application several times over the past few years in response to SECcomments.
December 10, 2019, the SECgranted exemptive relief to the firm's version of active ETFs; the following day, the NYSE Arca filed for 19b-4 trading approval on behalf of T. Rowe Price, coinciding with T. Rowe Price'sfiling of initial prospectuses with the SEC.
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