On the lookout for some new ETFs? Active ETFs had a great year in 2023 and are off to a hot start in 2024. The question, then, is how to choose from a growing list of strategies. One powerful heuristic for assessing ETFs — tech analysis — can help. Looking at which ETFs are sending buy signals can provide helpful data points in an ETF pros/cons list.
See more: T. Rowe Price’s Coyne on Active ETFs in 2024
In this case, tech analysis involves comparing an ETF’s price to its simple moving averages (SMA). When an ETF’s price rises above either its 50- or 200-day SMAs, that means the relevant ETFs are sending buy signals, indicating momentum. As an indicator, it does not provide total or perfect information. However, it can be a helpful marker of which strategies are on somewhat of an upswing.
The T. Rowe Price Dividend Growth ETF (TDVG)
Starting off, one may want to consider TDVG. The active ETF’s price of $36.93 per YCharts sat well above its SMAs as of February 27. The strategy may appeal to investors looking for an ETF that assesses deeper factors than a standard index tracking fund does.
TDVG’s active managers consider dividend yields, for example, as well as other balance sheet and growth type attributes in its approach. For a 50 basis point (bps) fee, TDVG may be one to watch, having returned 18.6% over one year.
TDVG’s tech chart per YCharts.
