T. Rowe Price QM US Bond ETF

TAGG

Market cap $1.49B

On this episode of the “ETF of the Week” podcast, VettaFi's head of research, Todd Rosenbluth, discussed the T. Rowe Price QM U.S. Bond ETF (TAGG) with Chuck Jaffe of Money Life.

VettaFi's Head of Research Todd Rosenbluth discussed the T. Rowe Price QM US Bond ETF (TAGG) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.

The Fed's looming decision to cut rates has many investors looking to their fixed income allocations. Bonds sometimes come across as a bit less exciting than equities, and for good reason, as their role is often used as a stabilizing force for many portfolios.

The Fed may have spent the last several months balking at cutting rates too soon amid stubborn inflation data, but rate cut advocates may finally have gotten the signal they wanted. Fed Chair Jerome Powell signaled a September cut on August 22, boosting market confidence.

In a year in which the bond outlook has been very uncertain, active bond ETFs have picked up major interest. One in particular, the active bond ETF TAGG, has added more than $1 billion in net inflows since January 1st according to ETF Database data.

Inflation dominated market narratives for months entering 2025, but has since been relegated below the fold. It may still be too soon to declare mission accomplished over inflation, however.

The Federal Reserve held rates once again to end July, but not without growing dissent among Fed governors. Indeed, the outlook on rates has grown more and more complicated, amid continued pressure from the Trump administration and persistent inflation in a steady market.

Advisors and investors showed strong interest in actively managed ETFs and municipal bond products in June according to VettaFi sentiment. While industrywide flows strong support the former, we think the latter is similarly compelling.

The Federal Reserve extended its wait-and-see interest rate policy at the June FOMC meeting. Officials also appear increasingly divided over the path of interest rates in the second half, prolonging investor and market uncertainty about second half outlooks.

This year's market environment remains a favorable one for active ETFs, with approximately 40% of flows funneling into the strategies year-to-date. As investors increasingly look beyond benchmark constraints for opportunity, T.