An Active ETF With Star Power

Key Morningstar Metrics for T. Rowe Price Capital Appreciation Equity ETF

• Morningstar Medalist Rating: Gold
• Process Pillar: Above Average
• People Pillar: High
• Parent Pillar: High

T. Rowe Price Capital Appreciation Equity ETF TCAF stands out in the competitive large-blend Morningstar Category, thanks to a proven manager with a disciplined investment approach and very low fees for an active strategy.

David Giroux leads this strategy. He is a three-time Morningstar Allocation Manager of the Year, in large part because of his savvy stock-picking. The exchange-traded fund, launched in June 2023, draws on the same process for picking stocks he’s honed for over a decade managing T. Rowe Price Capital Appreciation PRWCX. Under his leadership since 2007, that fund has consistently delivered strong results.

On June 30, 2025, Vivek Rajeswaran, Brian Solomon, and Mike Signore became comanagers alongside Giroux. All three had been associate portfolio managers on the team since 2023 and longtime analysts contributing to the stock selection and management of the team’s flagship multi-asset fund, where they were also named as comanagers. The promotions reflect their meaningful contributions to the investment process. It’s not an indication that Giroux plans to step back anytime soon.

The team begins by identifying companies without major long-term flaws, like poor management teams or unstable business models. It then focuses on those with reasonable valuations and strong potential for earnings growth and risk-adjusted results. This approach has typically led to a tilt toward growth stocks, thanks to their better financial health, with a consistent overweighting in the technology sector. However, the team has long preferred utilities for their stability, creating a nice balance in the portfolio. For example, at the end of October 2025, this ETF’s 10% allocation to utilities was 4 times more than the category average.

To maximize aftertax returns for shareholders, the managers will trade less frequently here than they do in the multi-asset mutual fund, focusing on a broader set of long-term holdings. The ETF’s dividend yield should also stay lower than the S&P 500’s to minimize taxable income, but that shouldn’t significantly affect the process. Higher-dividend-paying stocks like telecoms and REITs haven’t been key players in Giroux’s portfolios in the past.

Outperforming the S&P 500 over the long term is no easy feat, but with a 0.31% expense ratio and a skilled team at the helm, this ETF has a better shot than most.

T. Rowe Price Capital Appreciation Equity ETF: Performance Highlights

This ETF is built on the same disciplined approach that made David Giroux’s management of T. Rowe Price Capital Appreciation a standout through bull and bear markets, growth rallies, value revivals, and four US presidents. His record is impeccable, and we’re confident he can replicate that success here over the long term.

From his start as sole lead manager in 2007 through June 2025, T. Rowe Price Capital Appreciation landed in the top decile of the moderate-allocation category for the trailing three-, five-, 10-, and 15-year periods. It has yet to finish in the bottom half of the category in a single calendar year and has regularly trounced a blended benchmark of 60% S&P 500 and 40% Bloomberg US Aggregate Bond Index.

Those lofty results set an unreasonably high bar for any new strategy, and with this ETF turning two years old in June 2025, there’s a long way to go to show that success can be replicated in a stand-alone equity fund. Given the constraints on this fund’s process, the team aims to beat the S&P 500 by about 100 basis points annually over the long term (still quite a feat). That’s about a fourth of the outperformance they’ve delivered in the multi-asset strategy. Still, there’s a broader toolkit to use in the multi-asset fund that includes options, bonds, and the ability to follow a contrarian nature to buy market dips or reduce risk when markets present fewer compelling opportunities.

For its first two years through October 2025, the ETF returned 19.8%, trailing the S&P 500’s 21.9% annualized return but better than the average peer. It lagged the index by almost 5 percentage points in 2024, but investors shouldn’t expect this more even-keeled strategy to keep up in sharply rising bull markets. It did protect shareholders well when tariff-driven news sent the S&P 500 on a nearly 20% plunge from mid-February to early April in 2025. The ETF lost 15% during the period.