This Active Small-Cap ETF Is Sending a Buy Signal to End 2025

The ETF ecosystem is growing all the time, and sometimes even more quickly than most investors can appreciate. It can be easy, then, for investors to overlook ETFs that are spiking across various metrics. One active small-cap ETF in particular may be worth examining more closely amid so much ETF news. The strategy recently sent a buy signal, according to its tech chart, and may be poised to carry momentum into the new year.

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The T. Rowe Price Small-Mid Cap ETF (TMSL) combines both small and mid cap exposures in its active wrapper. It recently saw its price rise above both its 50 and 200-day simple moving averages (SMAs) per YCharts. That price action constitutes a  traditional buy signal for a security. 

Active Small-Cap ETF TMSL and 2026

Such a turn of events can be read as momentum for a given investment, and TMSL may have a case. Charging only 55 basis points, TMSL has performed well so far in 2025. The ETF has returned 12.7% YTD per ETF Database. That beat the fund’s ETF Database Category average of 7% in that time frame. It has particularly shined, however, over the last three-year period. The strategy returned 45.2% over the last three years according to YCharts data.

Might now be the time to take a dip into the strategy, given its buy signal and healthy performance to date? While small-caps have largely disappointed in recent times, TMSL could be poised for a positive year in 2026. For one, the fund may benefit from rate cuts that boost small-caps. The Fed may be poised to make cuts next year to boost a slowing economy.

What’s more, small-caps do present a source of diversification away from megacap tech concentration risk. While many investors likely won’t give up their AI hyperscaler investments, it may be a shrewd move to diversify into firms capable of offering major growth.

TMSL could play a role therein. The strategy’s active SMIDcap approach leans on T. Rowe Price’s fundamental research capabilities to identify firms in good positions. It assesses metrics like earnings quality, management capital allocation, return on equity, and near-term appreciation potential to help find standouts. For those looking for an ETF offering some momentum ahead of the new year, TMSL may be one to watch.

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