T. Rowe Price
U.S. Equity Research ETF
SUMMARY & ANALYSIS
"Enhanced S&P 500 Index Fund"
Fund will hold S&P 500 constituents, but based on internal research will outweigh and underweight individual names to achieve excess returns over the S&P 500.
Given that SPY is at 0.07% and this offering is at 0.34%, fund needs to provide at least 0.27% excess returns than SPY to achieve its objective.
Ticker: TBD
Exchange: NYSE Arca
Expense ratio: 0.34%
Original filing date: February 8, 2021
Effective date: April 26, 2021
Listing Date: TBD
CUSIP: TBD
Active: Yes
Actively-managed protocol: Will use proxy portfolio for daily portfolio disclosure.
Index: Not applicable
Investment Objective:
The fund seeks to
provide long-term capital growth.
Investment Strategy:
The strategy attempts to create a portfolio with similar characteristics to the Standard & Poor’s 500 Stock Index® (S&P 500 Index) with the potential to provide excess returns relative to the Index. The fund offers the possibility of attractive returns through a disciplined portfolio construction process and emphasis on stock selection by industry-focused analysts. This disciplined approach seeks to add value via stock selection within each industry while maintaining style and sector exposures close to those of the S&P 500 Index. Within each sector and industry, the weighting of individual fund holdings can vary significantly from their weighting within the S&P 500 Index. The fund, which may be considered an “enhanced index” fund, attempts to outperform the S&P 500 Index by overweighting those stocks that are viewed favorably relative to their weighting in the Index, and underweighting or avoiding those stocks that are viewed negatively.
Constituents: S&P 500
Adviser: T. Rowe Price
Prospectus is here.
Principal Investment Strategies
The fund will normally invest at least 80% of its assets in U.S. equity securities (or futures that have similar economic characteristics). The strategy attempts to create a portfolio with similar characteristics to the Standard & Poor’s 500 Stock Index® (S&P 500 Index) with the potential to provide excess returns relative to the Index. The fund offers the possibility of attractive returns through a disciplined portfolio construction process and emphasis on stock selection by industry-focused analysts. This disciplined approach seeks to add value via stock selection within each industry while maintaining style and sector exposures close to those of the S&P 500 Index. Within each sector and industry, the weighting of individual fund holdings can vary significantly from their weighting within the S&P 500 Index. The fund, which may be considered an “enhanced index” fund, attempts to outperform the S&P 500 Index by overweighting those stocks that are viewed favorably relative to their weighting in the Index, and underweighting or avoiding those stocks that are viewed negatively.
The fund will generally remain fully invested (less than 5% in cash reserves) and seeks to be sector neutral when compared to the S&P 500 Index. While the majority of assets will be invested in large-capitalization U.S. common stocks, the fund may have small- and mid-capitalization and foreign exposure in keeping with fund objectives.
The fund is “nondiversified,” meaning it may invest a greater portion of its assets in fewer issuers than is permissible for a “diversified” fund.
The fund is an actively-managed, exchange-traded fund (ETF) that does not disclose portfolio holdings daily. In order to provide market participants with information on the fund’s investments, the fund will publish a “Proxy Portfolio” on its website daily. A Proxy Portfolio is a basket of securities that is designed to closely track the daily performance of the fund’s portfolio holdings. While the Proxy Portfolio includes some of the fund’s holdings, it is not the fund’s actual portfolio. The Proxy Portfolio could be based on a broad-based securities index or the fund’s recently disclosed portfolio holdings. The fund’s Portfolio Overlap is available on the fund’s website daily. Each day, the website will also provide the fund’s Tracking Error, which means the standard deviation over the past three months of the daily proxy spread (i.e., the difference, in percentage terms, between the Proxy Portfolio’s per share NAV and that of the fund at the end of the trading day).
In pursuing its investment objective(s), the fund has the discretion to deviate from its normal investment criteria. These situations might arise when the adviser believes a security could increase in value for a variety of reasons, including an extraordinary corporate event, a new product introduction or innovation, a favorable competitive development, or a change in management. In all circumstances, the fund will limit allowable investments to those investments described in the Statement of Additional Information.
The fund may sell securities for a variety of reasons, including to realize gains, limit losses, or redeploy assets into more promising opportunities.
No comments:
Post a Comment