This is an actively managed ETF that uses the US mid-cap market as its baseline and assembles stock views produced by the manager's research team. Sector weights are kept similar to the mid-cap market, and the difference comes from stock-level selection, in what is known as a structured research approach.

It suits investors who want to add a mid-cap allocation to a portfolio centered on US large caps, and investors willing to pay for stock selection rather than index replication.

It is an ETF run with an active management approach by T. Rowe Price.

Sector weights are kept close to those of the mid-cap market, and within each sector the fund increases the weight of stocks that analysts favor. Because the structure builds its edge through stock selection without straying far from the overall market direction, performance differences tend to show up over cumulative periods rather than short ones.

• Designed to match sector weights to the market and differ only in stock selection
• Reflects the views of the manager's research team directly in the portfolio
• Wide range of holdings, so reliance on any single stock is relatively low
• A transparent active ETF that discloses its holdings daily

Assets under management (AUM) stand at $11.4M, and the expense ratio is 0.47% per year.

Because it is actively managed, its fee is relatively higher than that of index-tracking mid-cap ETFs. In the early period after listing, trading volume is thin and bid-ask spreads can widen, so limit orders are safer than market orders.

Mid caps are an asset class that tends to gain relative strength when the concentration in large technology stocks eases. However, this fund has a short track record, so there is not yet enough history to judge a performance trend. For now, it is more realistic to focus on the consistency of its management approach than on its returns.

The product emerged from the manager's effort to extend an existing mutual fund strategy into an ETF format. Its asset base is still at an early stage, so the things to watch are the pace at which assets accumulate and whether bid-ask spreads improve alongside it.

Its strength is that it applies the manager's research capabilities to mid caps, while its short track record and higher fee relative to index funds are drawbacks.

Among products in the same manager's structured research lineup, there is TSPA, which covers the entire US stock market, so the two can be combined by splitting market-cap segments. If cost is the priority, one approach is to compare fees against IJH, which simply follows a US mid-cap index, and MDY, another index-based mid-cap alternative, competes for the same slot. This ETF is the option among them that spends its fee budget on stock selection.

A new active ETF has to be judged without a performance record. So the things to check are not past returns but three items: cost structure, trading conditions and clarity of strategy.

On top of the volatility of the mid-cap asset class itself, there is the added risk that active management underperforms the market. Investors should also keep in mind that, because the initial asset base is small, execution costs may turn out larger than expected.

It is an option worth considering for investors who want to fill the US mid-cap segment with research-based active management. Investors who look at cost first are advised to compare its fee with that of index-based mid-cap products before deciding.