A sound investment process and strong management team underpin T. Rowe Price Total Return ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's sensible investment philosophy merits a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in A rated bonds and an overweight in securitized debt compared with category peers. The management team has aligned itself with the interests of the shareholders by investing in the strategy, earning it 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

Invesco Senior Loan ETF

T Rowe Price Floating Rate ETF

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. T. Rowe Price Total Return ETF earns a High Process Pillar rating.    The main driver of the rating is its parent firm's superior 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 strengthens the process. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their impressive 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 rating as well.

 The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks to maximize total return through income and, secondarily, capital appreciation.  The fund invests in a diversified portfolio of bonds and other debt instruments. The fund’s investments typically include, but are not limited to, debt instruments issued by the U.S. government and its agencies, corporate bonds, bank loans, and and various types of mortgage-backed and asset-backed securities. The fund may purchase or sell mortgage-backed securities on a delayed delivery or forward commitment basis through the “to-be-announced” (TBA) market.

 This strategy's 12-month yield is 5.0%, higher than its average peer's 3.9%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 5.1%. Higher yields tend to indicate higher credit risk.

High

Process

T. Rowe Price Total Return ETF earns an Above Average People Pillar rating. The most notable contributor to the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average ten-year Morningstar Rating of 3.6 stars. The firm's five-year retention rate of 86% also influences the rating. Lastly, the rating is limited by the managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns.


The strategy is backed by Anna A Dreyer, the longest-tenured manager, who has been a listed portfolio manager for eight years. The average Morningstar Rating of the strategies they currently manage is 2.7 stars, indicating that their risk-adjusted returns have underperformed the category average. Anna A Dreyer draws on only one other listed manager. Together, they are adequately equipped with eight years of average listed portfolio management experience. The highest personal investment by either manager is between $10,000 and $50,000. That is too low to promote alignment of their interests with the fund's investors.

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 Total Return ETF

TOTR is an actively managed fund that provides diversified exposure to US fixed income securities.

T.Rowe Price Small-Mid Cap ETF

Entering 2024, market narratives about several rate cuts spread like wildfire. The stock market started to bake in multiple cuts, with many getting client cash back into play.

There's Still Time to Get Out of Cash So Consider Active

As 2024 kicks off, investors may be looking to refresh their fixed income holdings. The Fed had signaled quite a bit that 2023 would see a higher-for-longer rate regime.

Shifting Bond Outlook Calls for Active Approach

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PIMCO Active Bond ETF

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iShares Core Total USD Bond Market ETF

JPMorgan Core Plus Bond ETF

USAA Core Intermediate-Term Bond ETF

Bond ETFs represent approximately 20% of the industry assets. Yet they have gathered more than 40% share of the net inflows in the first nine months of 2023.

Chart of the Week: Benefits of Active and Passive Bond Funds

Are the economic data turning on the “soft landing” narrative? U.S. stocks dropped on Tuesday following markets' downcast response to disappointing market data.

As U.S. Stocks Drop on Bad Data, Eye Active ETFs

Active ETFs have had a really strong year so far in 2023, picking up advisor and investor interest. Even institutional investors have increasingly turned towards specialist, responsive management.

Survey: Active ETFs Eating Into Mutual Funds

In a year that has seen active ETFs accelerate notably, institutional investor interest has grown in turn. Institutional investors, the pension funds, insurance companies, endowment funds, and other mega-money players have slightly different fund needs than retail investors.

Institutional Investors Eyeing Active ETFs

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JPMorgan USD Emerging Markets Sovereign Bond ETF

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Vanguard S&P 500 ETF

July was an impressive asset-gathering month for ETFs. Much of the heavy lifting was done by the industry's largest ETFs.

Which ETFs Saw Unexpected Demand in July

In the wide world of ETFs, few milestones matter more than hitting key AUM milestones. Reaching a new AUM threshold offers liquidity and indicates broad interest in the ETF's approach and merits.

Total Return ETF TOTR Hits $100 Million

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VanEck Vectors Semiconductor ETF

SPDR S&P 500 ETF Trust

T Rowe Price QM US Bond ETF

Technology Select Sector SPDR Fund

In this week's ETF Issuer League table, State Street and T. Rowe Price Investments stood out in their AUM tiers.

ETF AUM Issuer League: State Street, VanEck Lead

Yields make the world go round, and that may be truer than ever. U.S. investors and advisors can not only find potent yields domestically but also abroad.

Don't Ignore Global High Yield Amid Advisor Interest

T Rowe Price Ultra Short-Term Bond ETF

T Rowe Price US High Yield ETF

Demand for active ETFs is on the rise, with fund managers expecting adoption to grow, according to a survey from PwC. After surveying more than 70 executives (primarily ETF managers) in Q1, PwC found that respondents expect demand for active ETFs to increase over the next few years, with 74% of U.S.

Demand for Active ETFs Expected to Grow

Positive data regarding the U.S. economy and upgraded outlooks for Europe and China drove equity markets to rally at the start of the year.

A Recession Could Be Inevitable

Investors are planning to seek opportunities within fixed income if rates continue to rise. According to a recent survey of 120 U.S. institutional investors conducted by CoreData Research, nearly half (47%) of U.S. institutional investors plan to increase their allocation to fixed income if the Fed increases interest rates to around 5% as expected.

Investors Turn to Fixed Income as Rates Rise

Investors are returning to fixed income after a historically bad year for bonds. Economic uncertainty combined with the Federal Reserve's recent decision to raise interest rates by 25 basis points have served as huge tailwinds for the bond market.

Investors Turn to Fixed Income Amid Economic Uncertainty

While parking a client's assets in index funds may seem like the safe choice, there are some challenges with the passive approach — especially within the fixed income space.

The Limits of Passive Fixed Income Investing

Investors have had a renewed appetite for bonds so far this year, with bond funds seeing improved inflows after last year's inflation-racked market. While there are a number of ways to get bond exposure, consider active exchange traded fund (ETF) options.

As More Investors Head Into Bonds, Consider These 2 ETF Options

Big tech is undergoing sweeping layoffs amid fears of an impending recession. After Facebook parent Meta announced in November it would be cutting 11,000 jobs, Microsoft and Amazon said this month they were laying off 10,000 and 18,000 employees, respectively.

Big Tech Making Massive Job Cuts

2022 was a rough year for fixed income, to say the least. But considering how far the market has come, fixed income investors concerned about growth may want to start adding duration back to their portfolios.

Using Fixed Income to Navigate Changing Markets

More advisors are seeing the need to add active management to their portfolios, given the likelihood that the Federal Reserve will continue to raise interest rates.

Amid Rising Rates, More Advisors Consider Active Management

Financial advisors appear to be increasingly warming up to the importance of having actively managed ETFs in their client's portfolios.

Financial Advisors See Importance of Active Management

T Rowe Price Dividend Growth ETF

T Rowe Price Equity Income ETF

T Rowe Price US Equity Research ETF

T. Rowe Price issued a study concluding that its actively managed funds have outperformed its passive peer funds over the last 20 years ended September 30. Looking at rolling monthly 10-year periods from October 1, 2002, to September 30, 2022, for 124 actively managed T.

T. Rowe Price Active ETFs Outperform Passive Peers

The Federal Reserve has implemented an aggressive monetary policy tightening regime, throwing what should have been a safe-haven fixed income market into turmoil. As we re-adjust to this new rising rate environment, many investors will have to consider alternative strategies beyond the traditional core portfolio mix to adapt to the ongoing challenges.

Active Fixed-Income Answers to Tight Monetary Policy

As we consider the current bond market trends, investors can turn to actively managed bond ETF solutions that could be better suited in a more volatile environment. In the recent webcast, Active Fixed-Income Answers to Tight Monetary Policy, Andrew McCormick, head of fixed income at T.

Active Bond ETF Solutions for Today's Tricky Market Conditions

Break out the peppermint mochas and eggnog, it's tax loss harvesting season. With 2022 being a pretty rough year for bonds, active fixed income ETFs could be a good place to transition assets while harvesting losses, according to Holly Framsted, an ETF director at Capital Group.

Make Use of Active Fixed Income ETFs to Harvest Tax Losses

As a very volatile year winds down, it's time for investors to contemplate their tax loss harvesting strategies. Tax loss harvesting involves selling an investment at a loss, then reinvesting the proceeds of that sale into another asset.

News for T Rowe Price Total Return ETF ETF (TOTR)