$T. Rowe Price Hedged Equity ETF(THEQ.US)

With recession risks rising, this is an option to participate in the market while reducing risk during the late stage of the expansion cycle.

A hedged equity portfolio designed to reduce volatility

The Hedged Equity ETF aims to achieve strong risk-adjusted returns by investing in U.S. large-cap stocks while reducing risk through the use of various derivatives.

Investment Objective: The fund seeks long-term capital appreciation.

Strategy

The fund normally invests at least 80% of its net assets (plus any borrowings for investment purposes) in stocks. The fund's overall goal is to combine a long equity strategy with a derivatives-based hedging strategy to reduce portfolio volatility and provide protection during equity market downturns. As part of its long equity strategy, the fund invests a significant portion of its assets in T. Rowe Price and third-party exchange-traded funds (ETFs), particularly the T. Rowe Price U.S. Equity Research ETF (TSPA). TSPA seeks to build a portfolio with characteristics similar to the S&P 500 Index (the Index) and the potential to outperform the Index. For full strategy details, see the prospectus.

Highlights

The fund aims to achieve robust risk-adjusted returns and reduce equity risk, especially during significant market declines, by employing a variety of risk management tools. The fund seeks to provide a sufficient volatility buffer for market pullback events, thereby helping risk-averse investors maintain a higher allocation to active equities throughout the market cycle.

The fund is designed to be flexible, able to dynamically reduce risk, remain agile in changing market environments, and maintain a robust defensive posture. The fund fully leverages the proprietary research and world-class investment research platform of our multi-asset specialist team.

Utilizes various derivatives, such as index futures, Treasury futures, and index options, to reduce risk and dampen overall volatility.

https://www.troweprice.com/financial-intermediary/us/en/investments/etfs/hedged-equity-etf.html