T. Rowe Price U.S. Equity Research ETF (TSPA) Highlights Active Management and 0.34% Expense Ratio

On this episode of the “ETF of the Week” podcast, VettaFi’s Head of Research, Todd Rosenbluth, discussed the [T. Rowe Price US Equity Research ETF (TSPA)] with Chuck Jaffe of Money Life. The pair discussed several topics related to the fund to give investors a deeper understanding of the ETF. Chuck Jaffe: One fund, on point for today. The expert to talk about it. Welcome to the ETF of the Week! Yes, this is the ETF of the Week, where we get the latest take from Todd Rosenbluth, the head of research at VettaFi. And at VettaFi.com, you’ll find all the tools you need to make yourself a smarter, savvier investor in exchange-traded funds, and to check out and dig into the new, newsworthy, unique, and trending exchange-traded funds that we talk about here. Todd Rosenbluth, it’s great to see you again! Todd Rosenbluth: It’s great to be back! Chuck Jaffe: Your ETF of the Week is… Todd Rosenbluth: The T. Rowe Price U.S. Equity Research ETF, TSPA, or T-SPA! Chuck Jaffe: TSPA, the T. Rowe Price U.S. Equity Research ETF. Now, if I knew nothing else than, like, looking at a Morningstar rating, I would know that this fund has a five-star track record, et cetera. But to VettaFi, well, you have your own evaluations. So, why this ETF now? Todd Rosenbluth: Well, that’s good news, right? Let’s start with that. This fund has had a strong track record. That’s what you want to see for an actively managed ETF. Let’s just set a bit of the stage. Active ETFs gathered about a third of the overall assets — or new assets — in 2025. They represent just over 10%, roughly 11% of the overall total base of the ETF marketplace. So, said another way, active ETFs are punching above their weight. T. Rowe Price has been doing really well. It had a very strong 2025 with strong net inflows, and TSPA was one of those strong asset gatherers. So, it gathered close to $800 million of net new money. So, a strong track record offering exposure to the U.S. equity marketplace in a trend that’s working out well. We might as well be early in 2026 and talking about one of the success stories of 2025. Chuck Jaffe: Although interestingly, in 2025 — depending on whose analysis you’re using and how they define their categories — this fund was more middle of the pack. In 2023 and 2024, it was particularly exceptional. But this is, you know, the whole thing about it being U.S. Equity Research. This is not the same as just saying, “Hey, I want to go get a large-cap fund.” There’s supposed to be more to this fund, isn’t there? Todd Rosenbluth: There is. So this is — I would consider this to be T. Rowe Price’s research team’s best ideas portfolio for the U.S. So, T. Rowe Price has a deep, well-experienced team of stock analysts across all of the sectors that you would think are tied to the broader marketplace. These are their ideas. They cover the individual stocks. T. Rowe Price has stock analysts that support a wide range of different portfolios, but this is a chance for their analysts to be able to shine. And as you noted, the five-star record and strong performance in two of the three — or very strong performance in two of the three — calendar years is an example of that. What this ETF does is it overweights stocks that are in the S&P 500 that the analysts are liking and underweights stocks that the analysts are not liking. So, not necessarily getting rid of them, although they might. It’s not the full 500 stocks within the S&P 500; it’s closer to 300 overall within the portfolio. But as a former stock analyst, I like the idea that the stock analysts are driving the car instead of riding in the passenger seat, offering up ideas along the way. Chuck Jaffe: At the same time, let us just point out that if I look at the list of the top holdings in this fund as of the most recent portfolio check that I was able to give it, it’s Nvidia, Apple, Microsoft, Amazon, then it’s Alphabet, Meta, the other share of Alphabet, and Tesla. Those are all eight of the nine biggest portfolio holdings. Those eight are the “Mag Seven,” remembering that Alphabet is in there twice because of two different share classes. So, this is a fund that is heavy Mag Seven. So, how does that play with whatever somebody’s got in the rest of their portfolio that automatically might be heavy Mag Seven if it’s just an index fund? Todd Rosenbluth: So I think this is a core replacement or core complement strategy. You’re right. If you look at the names of the stocks that are heavily weighted, you’re going to find significant overlap in the names and some overlap in the allocations. What’s intended is that it holds the stocks that you would normally be holding, but you get the benefits of an active management effort. So, the managers for this are the heads of research, but the real managers, in my opinion, are those individual stock analysts. The T. Rowe Price analysts have a strong heritage that has helped to make T. Rowe Price a known stock picker that is now available in the ETF marketplace. And I’m not alone in saying that; this ETF now has $2.2 billion in assets under management. That’s been climbing because of the track record. So, if you own — and I’m going to piggyback on what you were saying or even get ahead of where you might go next — if you own the S&P 500 through an index-based product, you could use this to complement that to get a bit of active management capabilities without taking on too much risk. Or, this is a replacement for your S&P 500 strategy. So instead of just trying to replicate the market, you are trying to beat it. You’re trying to beat it without swinging for the fences all the time; you’re looking for singles and doubles, if I can use the baseball analogy in January — way before pitchers and catchers are close to showing up. I think this is an opportunity for people who want and believe in active management and want to have something that’s not exactly the S&P 500. It’s close, but you get stock-picking expertise. Right now, you and I are talking as earnings season kicks off. So, in that, you get the benefits of somebody watching those individual companies and then shifting around allocations based on what’s going on in the marketplace. Chuck Jaffe: Since we’re looking at that and we’re looking at the benefits of active management, how much are you paying for that active management? Because again, you’re getting not all, because it doesn’t have 500 holdings — you’ve got about 300 holdings — so you’re getting much of the large-cap index with an active management overlay. So it’s not quite the same allocations, et cetera. How much are you paying for this? Todd Rosenbluth: So, the expense ratio is 0.34, or 34 basis points. So if we wanted to do a ratio, this is notably higher than what you’d pay for S&P 500 index-based products. If you think of this relative to active management, actively managed ETFs tend to be, you know, more expensive. They’re not as expensive as what you’d pay for a mutual fund. So, 30 to 40 basis points is in the ballpark of what feels reasonable to me. But I would judge this fund, obviously, and hopefully investors are going to do so, net of fees. Hopefully you’re adding more than 34 basis points of outperformance on a gross basis so that you’re paying for active management and you’re getting rewarded for that active management. Chuck Jaffe: And one of the things that I have done for my grandson, Declan — and you can hear, he’s kind of excited about it — is that every time we use those sounders, well, on my podcast, we pay for audio services. We’ve paid him and we created a custodial Roth IRA. And it’s very funny because people were asking me what I was going to do, and I said I was going to get an index fund as the base for him to be able to save for the next 65 years. But then as I thought about it, I thought maybe I want to get an index fund and active management. And this was one of the funds I was looking at for active management. And my thought was that I would wind up saying, “Okay, if I do this for him for two years, I do one year with the traditional index fund and one year with something like TSPA,” because there’s that bonus kind of index-y, big market exposure, but some active management on top of it. So, I guess the question, when you talk about mixing things together, are you willing to do that for something that you’re expecting to be held for decades? Because that’s kind of the plan. Todd Rosenbluth: I like this strategy as a long-term core holding. I’m not offering investment advice to you and your family; I’m not offering investment advice to anybody. But why I like this as a long-term core potential holding is it’s not taking on too much risk at the security level because it owns, as we talked about, those long-term large-cap companies that you’d find within the S&P 500, and the weights are a little bit different. I also like that it’s not run by an individual. You don’t have a “portfolio manager risk,” to say it another way, because it’s a team of analysts. And so there might be a change at some point in one of the analysts and somebody new comes in or somebody gets promoted along the way, but you don’t have that same level of risk as you would for an individual manager. And even if one of these named portfolio managers left, they’re the heads of research. So the underlying stock picking is there, and it’s relatively cheap. The fee is not eating into your returns too much for the active management capability. So, I think for people who are looking for the future, for a long-term core holding, TSPA could — again, could — be one of those ideas. So I’m glad it was on your short list of ones to consider. Chuck Jaffe: Well, and just for the record, I ultimately decided to put the first year’s payment entirely into a traditional S&P 500 index fund. But the plan is to do exactly what I said and maybe next year kind of expand that portfolio out with a little bit of active management, and this will be on my list. So, it’ll be on my list in a while; it’s on your list right now. It is TSPA, the T. Rowe Price U.S. Equity Research ETF, the ETF of the week. Todd Rosenbluth, great stuff. We’ll talk to you again next week! Todd Rosenbluth: It’s always a pleasure, Chuck. Chuck Jaffe: The ETF of the Week is a joint production of VettaFi and Money Life with Chuck Jaffe. And I’m Chuck Jaffe. And if you want to check out my hour-long weekday podcast, go to MoneyLifeShow.com. Keep your eyes out when you’re looking at your favorite podcast app. Now, if you want to get more eyes on more research when it comes to your favorite ETFs, or maybe the one that might be your next favorite ETF, go to VettaFi.com and dig into their research there, because it will help you find the information you’re looking for. VettaFi is on X at @Vetta_Fi, and so is Todd Rosenbluth, their head of research, and my guest; he’s there at @ToddRosenbluth. The ETF of the Week is here for you every Thursday. Make sure you don’t miss an episode by following along on your favorite podcast app. And we’ll be back with another ETF for you to consider next week. Until then, happy investing, everybody!