T. Rowe Price Blue Chip Growth ETF

TCHP

Market cap $1.65B

What do you really own when you invest in growth funds? Growth-oriented equities have been a big driver of portfolio performance, but how best should investors get exposure?

T. Rowe Price Blue Chip Growth ETF is an actively managed large-cap ETF aiming to outperform the S&P 500 via concentrated growth holdings. TCHP has recently matched its benchmark, with notable wins like CVNA, but overall performance has not consistently exceeded SPY, especially after fees. The ETF carries a 0.57% expense ratio, higher volatility (beta 1.07), and heavy tech exposure, making it similar to SPY but with less liquidity.

The active ETF story has been one of the most exciting market narratives in recent years, with actively managed funds proliferating and delivering for their investors at a high level. As more and more active funds accumulate longer track records, then, investors can start to identify those active ETFs that have displayed consistent outperformance.

The T. Rowe Price Blue Chip Growth ETF has significantly outperformed the S&P 500 recently due to heavy concentration in mega-cap growth stocks, but this amplifies risk significantly. The ETF's high exposure to tech and consumer cyclical sectors, combined with limited transparency and higher fees, increases potential volatility. TCHP's recent performance is labeled by T. Rowe Price as "highly unusual and unlikely to be sustained," signaling caution for new investors.

T. Rowe Price Blue Chip Growth ETF is an actively managed ETF focused on blue-chip, growth-oriented U.S. large caps, aiming to outperform the S&P 500. Historically, TCHP lagged its benchmark and charged higher fees, but recent performance since Liberation Day has been impressive, beating SPY by ~8%. The fund's managers have made strong, timely picks like CVNA and shifted to a more diversified, growth-focused portfolio, increasing investor interest and liquidity.

TCHP, an actively managed ETF by T. Rowe Price, aims to outperform the S&P 500 but has failed to generate alpha. The fund's portfolio closely resembles the S&P 500 with higher weights in stocks like NVDA, MSFT, and AMZN. TCHP has shown greater volatility and lower risk-adjusted returns compared to passive ETFs like SPY and VOO, and a high fee of 0.57%.

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My friend and industry veteran Dave Nadig used to call the exercise of interpreting ETF asset flows as “reading the tea leaves.” I have always loved that image because it suggests asset flows can be telling, but they are also open to interpretation.