T. Rowe Price Small-Mid Cap ETF

TMSL

Market cap $1.13B

Entering 2025, one of the biggest market narratives investors faced was concentration risk. Despite tariffs coming and going with speed and stagflation a looming specter, concentration risk and the need for diversification continue to linger.

As investors consider ways to refresh portfolios in market uncertainty, one segment that may be receiving some new interest is small-caps. Small-cap investing can provide exposure to undervalued names and offset lingering concentration risk.

Halftime in 2025 threw a spotlight on active small- and midcap funds via the SPIVA U.S. Mid-Year 2025 report. The trend of active ETF launches is outpacing their passive peers this year.

In the ever-changing equities market landscape, investors have heard a few key themes for years. Small-caps' potential for upside has been a consistent one, and now could be their time to shine.

This year's turbulent market environment underscores the value proposition of actively managed strategies. Active ETFs may offer diversification benefits, a responsiveness to changing market environments, and a depth of fundamental research above and beyond that of their passive peers.

Major U.S. equity benchmarks made significant gains on Monday on tariff and de-escalation hopes in the trade war with China. While equities are on their way to recovering January 1 levels, enhanced volatility lends itself to actively managed strategies this year.

Ongoing market volatility, evolving U.S. economic and trade policy, and global risks cloud outlooks for 2025. Josh Nelson, head of global equity, T.

Active investing has come on in leaps and bounds in recent years. Since the arrival of the ETF rule in 2019, which made creating ETFs easier, active ETFs have blossomed.

Active ETFs have become much more popular in recent years, adding significant AUM amid numerous new launches.

Two exchange-traded fund experts deliver plays that should deliver multi-year gains.