/Oracle%20Corp_%20logo%20on%20phone%20and%20stock%20data-by%20Rokas%20Tenys%20via%20Shutterstock.jpg?ssl=1 "As Oracle Plans Thousands of Layoffs in Favor of AI Data Centers, How Should You Play ORCL Stock?")
It’s only March, and the VIX is up 62.4% YTD. It’s hardly surprising that the market volatility metric has risen so much, so quickly. The U.S. has attacked two countries playing important roles in global energy markets, while conflict continues in Ukraine and the eastern Mediterranean. Markets still present significant opportunities, however, for the right strategies.
See more: Report: Active ETFs Topped $2 Trillion in Global AUM in January
Active ETFs were designed in many ways for these exact circumstances. Where passive market indexes are forced to remain static amid market volatility, active ETFs can adapt and potentially prove more durable. The right active ETFs can provide resilience for portfolios and even chase upside when markets are riven by fear. These two provide intriguing takes on active ETFs for this year’s spiking market volatility.
The T. Rowe Price Natural Resources ETF
The T. Rowe Price Natural Resources ETF (TURF) has been a strong performer so far in a complicated year. TURF charges a 44 basis point (bps) fee for an active approach to upstream commodities. The firm’s managers lean on fundamental research to identify strong companies that can outperform their category rivals. It applies a bottom-up approach to portfolio construction, investing in firms of any market cap based on both growth and value approaches.
That has helped the ETF return 21.9% over the last three months according to ETF Database data, outperforming rival funds. Commodities extraction can meet rising demand for materials from AI related firms, for example, with firms involved available at lower costs than many domestic U.S. equities. Energy demand, for example, will continue to rise to feed AI, with some select extraction companies benefitting from geopolitical impact on prices.
The T. Rowe Price International Equity ETF
While some may see international headlines as cause to avoid ex-U.S. equities wholesale, opportunities abound in international equities. The right ETF, especially one with an active, adaptable approach, can help. The T. Rowe Price International Equity ETF (TOUS) charges a 50 bps fee to actively invest in international equities.
The fund has performed well amid the significant demand for ex-U.S. equities. Crafting a portfolio of about 150 stocks, its active managers look for high earnings potential and good valuation. They use local market inputs and macro data to find firms, also using a bottom-up approach.
Even amid recent market volatility, TOUS and its active approach has helped it return 23% over the last 12 months. TOUS has outperformed its ETF Database Category average with that performance. Its flexibility and active approach can help it find strong investments even as geopolitics introduces chaos. For those looking for active ETFs amid this volatility, TURF and TOUS can appeal.
For more news, information, and strategy, visit the Active ETF Content Hub.
