A sound investment process and strong management team underpin T. Rowe Price U.S. High Yield ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's effective investment philosophy supports a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in corporate bonds and B rated bonds compared with category peers. Confidence in the strategy's portfolio management drives an Above Average People Pillar rating. The strategy's parent organization earns the firm a High Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. T. Rowe Price U.S. High Yield ETF earns a High Process Pillar rating.    The main contributor to the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.6 stars. The parent firm's five-year risk-adjusted success ratio of 60% also influences the rating. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Their compelling success ratio suggests that the firm does well for investors and that this fund may benefit from that. The firm's five-year retention rate of 86% supports the process as well.

 Compared with other funds in the High Yield Bond Morningstar Category, this fund holds a similar cash position over the past few years. 

 This strategy's 12-month yield is 8.2%, higher than its average peer's 6.3%. In addition, it has a 7.3% 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return). While a higher yield may deliver more income, it also tends to indicate higher credit risk.

High

Process

T. Rowe Price U.S. High Yield ETF earns an Above Average People Pillar rating. The main contributor to the rating is its parent firm's superior long-term risk-adjusted performance, as shown by the firm's average ten-year Morningstar Rating of 3.6 stars. The combined average five-year excess return of each manager also influences the rating. It shows that the funds they manage have outperformed the average manager.

Above Average

People

T. Rowe Price remains an adaptable, trustworthy steward of capital, earning a High Parent rating. A $1.4 trillion asset base gives this time-tested firm a scale and presence few can match, but its heft has made it tougher for its equity strategies to build up positions in small- and mid-cap stocks without pushing against firm-level ownership limitations. To address this challenge, the firm split into two distinct research entities in March 2022. Six strategies, including five capacity-constrained equity strategies, moved to the new division, T. Rowe Price Investment Management, while the rest of the firm now exists as T. Rowe Price Associates. From 2019 to 2021, the firm bolstered its topnotch equity analyst team with new hires to fortify each division's research resources and ensure an orderly transition.

T. Rowe Price added to its array of offerings by acquiring alternative credit specialist Oak Hill Advisors in 2021. T. Rowe has seldom grown inorganically, but the move expanded its capabilities and helped diversify its asset base. Equities remain T. Rowe's strength. It would like to grow its fixed-income business, though that segment remains a step behind peers; it only recently hired dedicated risk personnel in that area.

While the shift to passive investing continues to challenge active managers, T. Rowe Price's impressive bench of investment talent, prudent corporate management, and relatively low fees continue to give it an advantage.

Parent

T Rowe Price US High Yield ETF

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