T. Rowe Price Exchange-Traded Funds Inc.

08/24/2026 | Press release | Distributed by Public on 08/24/2026 07:11

Semi-Annual Report by Investment Company (Form N-CSRS)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act File Number: 811-23494

T. Rowe Price Exchange-Traded Funds, Inc.

(Exact name of registrant as specified in charter)

1307 Point Street, Baltimore, MD 21231

(Address of principal executive offices)

David Oestreicher

1307 Point Street, Baltimore, MD 21231

(Name and address of agent for service)

Registrant's telephone number, including area code: (410) 345-2000

Date of fiscal year end: December 31 

Date of reporting period: June 30, 2026

Item 1. Reports to Shareholders

(a) Report pursuant to Rule 30e-1

Semi-Annual Shareholder Report

June 30, 2026

Financials ETF (TFNS)

Principal Listing Exchange: Nasdaq Stock Market LLC

This semi-annual shareholder report contains important information about Financials ETF (the "fund") for the period of January 1, 2026 to June 30, 2026. You can find the fund's prospectus, financial information on Form N-CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information at www.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1-800-638-5660 or [email protected] or by contacting your intermediary.

What were the fund costs for the last six months? (based on a hypothetical $10,000 investment)

Table Summary
Fund name
Costs of a $10,000 investment
Costs paid as a percentage of a $10,000 investment
Financials ETF
$22
0.44%

What are some fund statistics?

Fund Statistics

  • Total Net Assets (000s)$13,759
  • Number of Portfolio Holdings79
  • Portfolio Turnover Rate20.8%

What did the fund invest in?

Industry Allocation (as a % of Net Assets)

Table Summary
Money Center Banks
17.8%
Payments
15.8
Miscellaneous Insurance
9.8
Investment Banks
8.0
Brokerage & Wealth Managers
5.7
Consumer Finance
5.6
Large Regional Banks
5.6
Primary Commercial
5.5
Brokers
4.0
Other
22.2

Top Ten Holdings (as a % of Net Assets)

Table Summary
Berkshire Hathaway
9.9%
Visa
6.9
Mastercard
6.0
Bank of America
5.2
JPMorgan Chase
5.0
Goldman Sachs Group
4.1
Wells Fargo
3.8
Citigroup
3.7
Charles Schwab
3.4
Morgan Stanley
3.1

If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.

Visit www.troweprice.com/en/us/market-data-disclosures for additional legal notices & disclaimers.

Financials ETF (TFNS)

T. Rowe Price Investment Services, Inc.

1307 Point Street

Baltimore, Maryland 21231

Principal Listing Exchange: Nasdaq Stock Market LLC

202506-4610402

ETF1193-053 08/26

Item 1. (b) Notice pursuant to Rule 30e-3.

Not applicable.

Item 2. Code of Ethics.

A code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions is filed as an exhibit to the registrant's annual Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the registrant's most recent fiscal half-year.

Item 3. Audit Committee Financial Expert.

Disclosure required in registrant's annual Form N-CSR.

Item 4. Principal Accountant Fees and Services.

Disclosure required in registrant's annual Form N-CSR.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

(a) Not applicable. The complete schedule of investments is included in Item 7 of this Form N-CSR.

(b) Not applicable.

Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.

(a - b) Report pursuant to Regulation S-X.

Financial Statements and Other Information
June 30, 2026
    
T. ROWE PRICE
TFNS
Financials ETF
For more insights from T. Rowe Price investment
professionals, go to troweprice.com.
T. ROWE PRICE FINANCIALS ETF
Unaudited
 FINANCIAL HIGHLIGHTS 
For a share outstanding throughout each period
 
6 Months
Ended
6/11/25(1)
Through
6/30/26
12/31/25
NET ASSET VALUE
Beginning of period
$ 27.47
$ 25.00
Investment activities
Net investment income(2)(3)
0.17
0.15
Net realized and unrealized gain/loss
(0.12)(4)
2.46
Total from investment activities
0.05
2.61
Distributions
Net investment income
-
(0.14)
NET ASSET VALUE
End of period
$ 27.52
$ 27.47
Ratios/Supplemental Data
Total return, based on NAV(3)(5)
0.18%
10.41%
Ratios to average net
assets:(3)
Gross expenses before
waivers/payments by
Price Associates
0.44%(6)
0.44%(6)
Net expenses after
waivers/payments by
Price Associates
0.44%(6)
0.44%(6)
Net investment income
1.31%(6)
1.06%(6)
Portfolio turnover rate(7)
20.8%
13.6%
Net assets, end of period
(in thousands)
$ 13,759
$ 12,364
 
(1)
Inception date 
(2)
Per share amounts calculated using average shares outstanding method. 
(3)
Includes the impact of expense-related arrangements with Price Associates. 
(4)
The amount presented is inconsistent with the fund's aggregate gains and losses because of
the timing of sales and redemptions of fund shares in relation to fluctuating market values for
the investment portfolio. 
(5)
Total return reflects the rate that an investor would have earned on an investment in the fund
during each period, assuming reinvestment of all distributions. Total return is not annualized
for periods less than one year.  
(6)
Annualized 
(7)
Portfolio turnover excludes securities received or delivered through in-kind share
transactions. 
The accompanying notes are an integral part of these financial statements.
1
T. ROWE PRICE FINANCIALS ETF
June 30, 2026 Unaudited
 
 PORTFOLIO OF INVESTMENTS‡ 
Shares
$ Value
(Cost and value in $000s)
COMMON STOCKS 99.6%
BANKS 28.8%
Community Banks 2.4%
Associated Banc
1,341
41
Central BanCo
1,028
31
Columbia Banking System
2,532
81
Firstsun Capital Bancorp (1)
714
28
Fulton Financial
3,026
73
UMB Financial
509
73
327
International Banks 1.1%
Barclays, ADR
3,445
93
KB Financial Group, ADR
345
36
NU Holdings, Class A (1)
2,231
30
159
Large Regional Banks 5.6%
Fifth Third Bancorp
509
29
Huntington Bancshares
8,527
151
Pinnacle Financial Partners
964
97
Popular
664
109
U.S. Bancorp
3,903
236
Western Alliance Bancorp
1,754
144
766
Money Center Banks 17.8%
Bank of America
12,669
722
Citigroup
3,596
503
JPMorgan Chase
2,109
690
Wells Fargo
6,398
529
2,444
2
T. ROWE PRICE FINANCIALS ETF
Shares
$ Value
(Cost and value in $000s)
Trust Banks 1.9%
Bank of New York Mellon
943
136
Northern Trust
78
14
State Street
669
113
263
Total Banks
3,959
CAPITAL MARKETS 22.5%
Alternative Asset Managers 3.1%
Apollo Global Management
1,112
132
Ares Management
624
70
Blackstone
308
36
KKR
1,769
162
StepStone Group, Class A
637
26
426
Brokerage & Wealth Managers 5.7%
Ameriprise Financial
299
137
Charles Schwab
5,068
468
Etoro Group, Class A (1)
1,642
65
Interactive Brokers Group, Class A
265
23
LPL Financial Holdings
144
41
Robinhood Markets, Class A (1)
484
48
782
Exchanges 3.2%
CME Group
543
120
Intercontinental Exchange
1,202
148
Marex Group
437
27
Miami International Holdings (1)
733
27
StoneX Group (1)
477
56
Tradeweb Markets, Class A
420
42
3
T. ROWE PRICE FINANCIALS ETF
Shares
$ Value
(Cost and value in $000s)
Virtu Financial, Class A
335
20
440
Investment Banks 8.0%
Goldman Sachs Group
557
563
Lincoln International (1)
1,468
35
Morgan Stanley
2,015
421
UBS Group (1)
1,786
89
1,108
Traditional Asset Managers 2.5%
Blackrock
254
244
Invesco
3,589
95
339
Total Capital Markets
3,095
CONSUMER FINANCE 5.6%
Consumer Finance 5.6%
American Express
544
184
Capital One Financial
2,043
410
SLM
4,861
126
Synchrony Financial
615
47
Total Consumer Finance
767
INSURANCE 24.6%
Brokers 4.0%
Aon, Class A
473
157
Brown & Brown
594
38
Marsh & McLennan
1,618
270
Willis Towers Watson
354
92
557
Life & Health 2.3%
Corebridge Financial
512
15
Equitable Holdings
1,181
52
4
T. ROWE PRICE FINANCIALS ETF
Shares
$ Value
(Cost and value in $000s)
MetLife
1,902
161
Voya Financial
946
85
313
Miscellaneous Insurance 9.8%
Berkshire Hathaway, Class B (1)
2,709
1,356
1,356
Primary Commercial 5.5%
American International Group
2,269
169
Axis Capital Holdings
1,104
119
Chubb
1,055
359
Hartford Insurance Group
356
47
Travelers
176
58
752
Primary Personal Lines 2.8%
Allstate
1,017
242
Progressive
649
142
384
Reinsurance 0.2%
RenaissanceRe Holdings
91
29
29
Total Insurance
3,391
PAYMENTS & BUSINESS SERVICES & MISCELLANEOUS 18.1%
Business Services 0.6%
Equifax
215
34
MSCI
93
52
86
Payments 15.8%
Block (1)
1,321
100
Corpay (1)
200
67
5
T. ROWE PRICE FINANCIALS ETF
Shares
$ Value
(Cost and value in $000s)
Fiserv (1)
1,807
89
Global Payments
1,480
107
Mastercard, Class A
1,599
821
PayPal Holdings
1,185
51
Visa, Class A
2,751
944
2,179
Rating Agencies & Miscellaneous 1.7%
Moody's
74
34
S&P Global
479
195
229
Total Payments & Business services & Miscellaneous
2,494
Total Common Stocks (Cost $12,886)
13,706
SHORT-TERM INVESTMENTS 0.4%
Money Market Funds 0.4%
State Street Institutional U.S. Government Money Market Fund,
3.58% (2)
47,558
48
Total Short-Term Investments (Cost $47)
48
Total Investments in Securities
100.0% of Net Assets (Cost $12,933)
$13,754
 
‡
Shares are denominated in U.S. dollars unless otherwise noted.
(1)
Non-income producing
(2)
Seven-day yield
ADR
American Depositary Receipts
6
T. ROWE PRICE FINANCIALS ETF
AFFILIATED COMPANIES
($000s)
The fund may invest in certain securities that are considered affiliated companies. As defined by the 1940 Act, an affiliated company is one in which the fund owns 5% or more of the outstanding voting securities, or a company that is under common ownership or control. The following securities were considered affiliated companies for all or some portion of the six months ended June 30, 2026. Net realized gain (loss), investment income, change in net unrealized gain/loss, and purchase and sales cost reflect all activity for the period then ended. 
Affiliate
Net Realized Gain
(Loss)
Changes in Net
Unrealized
Gain/Loss
Investment
Income
T. Rowe Price Treasury Reserve Fund
$-
$-
$-
++
Totals
$-
#
$-
$-
+
 
Supplementary Investment Schedule
Affiliate
Value
12/31/25
Purchase
Cost
Sales
Cost
Value
6/30/26
T. Rowe Price Treasury Reserve Fund
$-
¤
¤
$-
Total
$-
^
 
++
Excludes earnings on securities lending collateral, which are subject to rebates and fees as
described in Note 3.
#
Capital gain distributions from underlying Price funds represented $0 of the net realized gain
(loss).
+
Investment income comprised $0 of dividend income and $0 of interest income.
¤
Purchase and sale information not shown for cash management funds.
^
The cost basis of investments in affiliated companies was $0.
The accompanying notes are an integral part of these financial statements.
7
T. ROWE PRICE FINANCIALS ETF
June 30, 2026 Unaudited
 STATEMENT OF ASSETS AND LIABILITIES 
($000s, except shares and per share amounts)
 
Assets
Investments in securities, at value (cost $12,933)
$13,754 
Receivable for investment securities sold
66 
Dividends receivable
8 
Total assets
13,828 
Liabilities
Payable for investment securities purchased
64 
Investment management and administrative fees payable
5 
Total liabilities
69 
NET ASSETS
$13,759 
Net Assets Consists of:
 
Total distributable earnings (loss)
$1,052 
Paid-in capital applicable to 500,000 shares of $0.0001 par value
capital stock outstanding; 4,000,000,000 shares of the Corporation
authorized
12,707 
NET ASSETS
$13,759 
NET ASSET VALUE PER SHARE
$27.52 
The accompanying notes are an integral part of these financial statements.
8
T. ROWE PRICE FINANCIALS ETF
Unaudited
 STATEMENT OF OPERATIONS 
($000s)
 
6 Months
Ended
6/30/26
Investment Income (Loss)
Dividend income
$111 
Investment management and administrative expense
28 
Net investment income
83 
Realized and Unrealized Gain / Loss
Net realized gain (loss)
Securities
23 
In-kind redemptions
184 
Net realized gain
207 
Change in net unrealized gain / loss on securities
(130)
Net realized and unrealized gain / loss
77 
INCREASE IN NET ASSETS FROM OPERATIONS
$160 
The accompanying notes are an integral part of these financial statements.
9
T. ROWE PRICE FINANCIALS ETF
Unaudited
 STATEMENT OF CHANGES IN NET ASSETS 
($000s)
 
6 Months
Ended
6/11/25
Through
6/30/26
12/31/25
Increase (Decrease) in Net Assets
Operations
Net investment income
$83 
$64 
Net realized gain
207 
85 
Change in net unrealized gain / loss
(130)
951 
Increase in net assets from operations
160 
1,100 
Distributions to shareholders
Net earnings
- 
(61)
Capital share transactions*
Shares sold
2,588 
13,918 
Shares redeemed
(1,353)
(2,593)
Increase in net assets from capital share
transactions
1,235 
11,325 
Net Assets
Increase during period
1,395 
12,364 
Beginning of period
12,364 
- 
End of period
$13,759 
$12,364 
*Share information (000s)
Shares sold
100 
550 
Shares redeemed
(50)
(100)
Increase in shares outstanding
50 
450 
The accompanying notes are an integral part of these financial statements.
10
T. ROWE PRICE FINANCIALS ETF
Unaudited
 NOTES TO FINANCIAL STATEMENTS 
T. Rowe Price Exchange-Traded Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act). The Financials ETF (the fund) is a nondiversified, open-end management investment company established by the corporation. The fund incepted on June 11, 2025. The fund seeks long-term capital appreciation.
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 (ASC 946). The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), including, but not limited to, ASC 946. GAAP requires the use of estimates made by management. Management believes that estimates and valuations are appropriate; however, actual results may differ from those estimates, and the valuations reflected in the accompanying financial statements may differ from the value ultimately realized upon sale or maturity.
Investment Transactions, Investment Income, and Distributions
Investment transactions are accounted for on the trade date basis. Income and expenses are recorded on the accrual basis. Realized gains and losses are reported on the identified cost basis. Income tax-related interest and penalties, if incurred, are recorded as income tax expense. Dividends received from other investment companies are reflected as dividend income; capital gain distributions are reflected as realized gain/loss. Dividend income and capital gain distributions are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the asset received. Proceeds from litigation payments, if any, are included in either net realized gain (loss) or change in net unrealized gain/loss from securities. Distributions to shareholders are recorded on the ex-dividend date. Income distributions, if any, are declared and paid annually. A capital gain distribution, if any, may also be declared and paid by the fund annually. Dividends and distributions cannot be automatically reinvested in additional shares of the fund.
11
T. ROWE PRICE FINANCIALS ETF
Capital Transactions
The fund issues and redeems shares at its net asset value (NAV) only with Authorized Participants and only in large blocks of 50,000 shares (each, a "Creation Unit"). The fund's NAV per share is computed at the close of the New York Stock Exchange (NYSE), normally 4 p.m. Eastern time, each day the NYSE is open for business. However, the NAV per share may be calculated at a time other than the normal close of the NYSE if trading on the NYSE is restricted, if the NYSE closes earlier, or as may be permitted by the SEC. Individual fund shares may not be purchased or redeemed directly with the fund. An Authorized Participant may purchase or redeem a Creation Unit of the fund each business day that the fund is open in exchange for the delivery of a designated portfolio of in-kind securities and/or cash. When purchasing or redeeming Creation Units, Authorized Participants are also required to pay a fixed and/or variable purchase or redemption transaction fee as well as any applicable additional variable charge to defray the transaction cost to a fund.
Individual fund shares may be purchased and sold only on a national securities exchange through brokers. Shares are listed for trading on Nasdaq Stock Market LLC and because the shares will trade at market prices rather than NAV, shares may trade at prices greater than NAV (at a premium), at NAV, or less than NAV (at a discount).
Indemnification
In the normal course of business, the fund may provide indemnification in connection with its officers and directors, service providers, and/or private company investments. The fund's maximum exposure under these arrangements is unknown; however, the risk of material loss is currently considered to be remote.
NOTE 2 - VALUATION
Fair Value
The fund's financial instruments are valued at the close of the NYSE and are reported at fair value, which GAAP defines as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fund's Board of Directors (the Board) has designated T. Rowe Price Associates, Inc. as the fund's valuation designee (Valuation Designee). Subject to oversight by the Board, the Valuation Designee performs the following functions in performing fair value determinations: assesses and manages valuation risks; establishes and applies fair value methodologies; tests fair value methodologies; and evaluates pricing vendors and pricing agents.
12
T. ROWE PRICE FINANCIALS ETF
The duties and responsibilities of the Valuation Designee are performed by its Valuation Committee. The Valuation Designee provides periodic reporting to the Board on valuation matters.
Various valuation techniques and inputs are used to determine the fair value of financial instruments. GAAP establishes the following fair value hierarchy that categorizes the inputs used to measure fair value:
Level 1 - quoted prices (unadjusted) in active markets for identical financial instruments that the fund can access at the reporting date
Level 2 - inputs other than Level 1 quoted prices that are observable, either directly or indirectly (including, but not limited to, quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and credit spreads)
Level 3 - unobservable inputs (including the Valuation Designee's assumptions in determining fair value)
Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use to price the financial instrument. Unobservable inputs are those for which market data are not available and are developed using the best information available about the assumptions that market participants would use to price the financial instrument. GAAP requires valuation techniques to maximize the use of relevant observable inputs and minimize the use of unobservable inputs. When multiple inputs are used to derive fair value, the financial instrument is assigned to the level within the fair value hierarchy based on the lowest-level input that is significant to the fair value of the financial instrument. Input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level but rather the degree of judgment used in determining those values.
Valuation Techniques
Equity securities, including exchange-traded funds, listed or regularly traded on a securities exchange or in the over-the-counter (OTC) market are valued at the last quoted sale price or, for certain markets, the official closing price at the time the valuations are made. A security that is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for such security. Listed securities not traded on a particular day are valued at the mean of the closing bid and asked prices for domestic securities.
13
T. ROWE PRICE FINANCIALS ETF
Investments in mutual funds are valued at the mutual fund's closing NAV per share on the day of valuation. Assets and liabilities other than financial instruments, including short-term receivables and payables, are carried at cost, or estimated realizable value, if less, which approximates fair value.
Investments for which market quotations are not readily available or deemed unreliable are valued at fair value as determined in good faith by the Valuation Designee. The Valuation Designee has adopted methodologies for determining the fair value of investments for which market quotations are not readily available or deemed unreliable, including the use of other pricing sources. Factors used in determining fair value vary by type of investment and may include market or investment specific considerations. The Valuation Designee typically will afford the greatest weight to actual prices in arm's length transactions, to the extent they represent orderly transactions between market participants, transaction information can be reliably obtained, and prices are deemed representative of fair value. However, the Valuation Designee may also consider other valuation methods such as market-based valuation multiples; a discount or premium from market value of a similar, freely traded security of the same issuer; discounted cash flows; yield to maturity; or some combination. Fair value determinations are reviewed on a regular basis. Because any fair value determination involves a significant amount of judgment, there is a degree of subjectivity inherent in such pricing decisions. Fair value prices determined by the Valuation Designee could differ from those of other market participants, and it is possible that the fair value determined for a security may be materially different from the value that could be realized upon the sale of that security.
Valuation Inputs
On June 30, 2026, all of the fund's financial instruments were classified as Level 1, based on the inputs used to determine their fair values.
NOTE 3 - OTHER INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following practices to manage exposure to certain risks and/or to enhance performance. The investment objective, policies, program, and risk factors of the fund are described more fully in the fund's prospectus and Statement of Additional Information.
14
T. ROWE PRICE FINANCIALS ETF
Securities Lending
The fund may lend its securities to approved borrowers to earn additional income. Its securities lending activities are administered by a lending agent in accordance with a securities lending agreement. Security loans generally do not have stated maturity dates, and the fund may recall a security at any time. The fund receives collateral in the form of cash or U.S. government securities. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities; any additional collateral required due to changes in security values is delivered to the fund the next business day. Cash collateral is invested in accordance with investment guidelines approved by fund management. Additionally, the lending agent indemnifies the fund against losses resulting from borrower default. Although risk is mitigated by the collateral and indemnification, the fund could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities, collateral investments decline in value, and the lending agent fails to perform. Any non-cash collateral received cannot be sold, re-invested or pledged by the fund, except in the event of borrower default. Securities lending revenue consists of earnings on invested collateral and borrowing fees, net of any rebates to the borrower, compensation to the lending agent, and other administrative costs. In accordance with GAAP, investments made with cash collateral are reflected in the accompanying financial statements, but collateral received in the form of securities is not. At June 30, 2026, there were no securities on loan.
Other
Purchases and sales of portfolio securities excluding in-kind transactions and short-term securities aggregated $2,631,000 and $2,783,000, respectively, for the six months ended June 30, 2026. Portfolio securities received and delivered through in-kind transactions aggregated $2,574,000 and $1,088,000, respectively, for the six months ended June 30, 2026.
NOTE 4 - FEDERAL INCOME TAXES
Generally, no provision for federal income taxes is required since the fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and distribute to shareholders all of its taxable income and gains. Distributions determined in accordance with federal income tax regulations may differ in amount or character from net investment income and realized gains for financial reporting purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character but are not
15
T. ROWE PRICE FINANCIALS ETF
adjusted for temporary differences. The amount and character of tax-basis distributions and composition of net assets are finalized at fiscal year-end; accordingly, tax-basis balances have not been determined as of the date of this report.
The fund intends to retain realized gains to the extent of available capital loss carryforwards. Net realized capital losses may be carried forward indefinitely to offset future realized capital gains. As of December 31, 2025, the fund had $57,000 of available capital loss carryforwards.
At June 30, 2026, the cost of investments (including derivatives, if any) for federal income tax purposes was $12,935,000. Net unrealized gain aggregated $819,000 at period-end, of which $1,334,000 related to appreciated investments and $515,000 related to depreciated investments.
NOTE 5 - RELATED PARTY TRANSACTIONS
The fund is managed by T. Rowe Price Associates, Inc. (Price Associates), a wholly owned subsidiary of T. Rowe Price Group, Inc. (Price Group). The investment management agreement between the fund and Price Associates provides for an annual all-inclusive fee equal to 0.44% of the fund's average daily net assets. The fee is computed daily and paid monthly. The all-inclusive fee covers investment management services and ordinary, recurring operating expenses but does not cover interest and borrowing expenses; taxes; brokerage commissions and other transaction costs; fund proxy expenses; and nonrecurring and extraordinary expenses. All costs related to organization and offering of the fund are borne by Price Associates.
T. Rowe Price Investment Services, Inc. (Investment Services) serves as distributor to the fund. Pursuant to an underwriting agreement, no compensation for any distribution services provided is paid to Investment Services by the fund.
Cash collateral from securities lending, if any, is invested in the T. Rowe Price Treasury Reserve Fund (the Price Reserve Fund), a money market fund offered as a short-term investment option to mutual funds, trusts, and other accounts managed by Price Associates or its affiliates and is not available for direct purchase by members of the public. The Price Reserve Fund does not pay investment management fees.
As of June 30, 2026, T. Rowe Price Group, Inc., or its wholly owned subsidiaries, owned 350,000 shares of the fund, representing 70% of the fund's net assets.
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T. ROWE PRICE FINANCIALS ETF
The fund may participate in securities purchase and sale transactions with other funds or accounts advised by Price Associates (cross trades), in accordance with procedures adopted by the fund's Board and Securities and Exchange Commission rules, which require, among other things, that such purchase and sale cross trades be effected at the independent current market price of the security. During the six months ended June 30, 2026, the fund had no purchases or sales cross trades with other funds or accounts advised by Price Associates.
NOTE 6 - SEGMENT REPORTING
Operating segments are defined as components of a company that engage in business activities and for which discrete financial information is available and regularly reviewed by the chief operating decision maker (CODM) in deciding how to allocate resources and assess performance. The Management Committee of Price Group acts as the fund's CODM. The fund makes investments in accordance with its investment objective as outlined in the Prospectus and is considered one reportable segment because the CODM allocates resources and assesses the operating results of the fund on the whole.
The fund's revenue is derived from investments in a portfolio of securities. The CODM allocates resources and assesses performance based on the operating results of the fund, which is consistent with the results presented in the statement of operations, statement of changes in net assets and financial highlights. The CODM compares the fund's performance to its benchmark index and evaluates the positioning of the fund in relation to its investment objective. The measure of segment assets is net assets of the fund which is disclosed in the statement of assets and liabilities.
The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The financial statements include all details of the segment assets, segment revenue and expenses; and reflect the financial results of the segment.
NOTE 7 - OTHER MATTERS
Unpredictable environmental, political, social and economic events, including but not limited to, environmental or natural disasters, war and conflict, terrorism, geopolitical and regulatory developments (including trading and tariff arrangements), and public health epidemics or threats, may significantly affect the
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T. ROWE PRICE FINANCIALS ETF
economy and the markets and issuers in which a fund invests. The extent and duration of such events and resulting market disruptions cannot be predicted. These and other similar events may cause instability across global markets, including reduced liquidity and disruptions in trading markets, while some events may affect certain geographic regions, countries, sectors, and industries more significantly than others, and exacerbate other pre-existing political, social, and economic risks. The fund's performance could be negatively impacted if the value of a portfolio holding were harmed by these or such events.
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T. ROWE PRICE FINANCIALS ETF
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
Each year, the fund's Board of Directors (Board) considers the continuation of the investment management agreement (Advisory Contract) between the fund and its investment adviser, T. Rowe Price Associates, Inc. (Adviser). In that regard, at a meeting held on March 11-12, 2026 (Meeting), the Board, including all of the fund's independent directors who were present in person at the Meeting, approved the continuation of the fund's Advisory Contract. At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and the approval of the Advisory Contract. The independent directors were assisted in their evaluation of the Advisory Contract by independent legal counsel from whom they received separate legal advice and with whom they met separately.
In providing information to the Board, the Adviser was guided by a detailed set of requests for information submitted by independent legal counsel on behalf of the independent directors. In considering and approving the continuation of the Advisory Contract, the Board considered the information it believed was relevant, including, but not limited to, the information discussed below. The Board considered not only the specific information presented in connection with the Meeting but also the knowledge gained over time through interaction with the Adviser about various topics and information provided to it by the Adviser. The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the T. Rowe Price funds' advisory contracts, including performance and the services and support provided to the funds and their shareholders.
Services Provided by the Adviser
The Board considered the nature, quality, and extent of the services provided to the fund by the Adviser. These services include, but are not limited to, directing the fund's investments in accordance with its investment program and the overall management of the fund's portfolio, as well as a variety of related activities such as financial, investment operations, and administrative services; compliance and infrastructure, as well as compliance with new and evolving regulatory requirements (e.g., derivatives and liquidity risk management); maintaining the fund's records and registrations; and shareholder communications. The Board also reviewed the background and experience of the Adviser's senior management team and investment personnel involved in the management of the fund, as well as the Adviser's compliance record. The Board concluded that the information it considered with respect to the nature, quality, and extent of the services provided by the Adviser, as well as the other factors considered at the Meeting, supported the Board's approval of the continuation of the Advisory Contract.
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APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT (continued)
Investment Performance of the Fund
The Board took into account discussions with the Adviser and detailed reports that it regularly receives throughout the year on relative and absolute performance for the T. Rowe Price funds. In connection with the Meeting, the Board reviewed information provided by the Adviser that compared the fund's total returns, as well as a wide variety of other previously agreed-upon performance measures and market data, against relevant benchmark indexes and (as applicable) peer groups of funds with similar investment programs for various periods through December 31, 2025. The Board did not review any relative performance information from Broadridge because the fund recently incepted in June 2025.
In the course of its deliberations, the Board considered performance information provided throughout the year and in connection with the Advisory Contract review at the Meeting, as well as information provided during investment review meetings conducted with portfolio managers and senior investment personnel during the course of the year regarding the fund's performance. The Board also considered relevant factors, such as overall market conditions and trends that could adversely impact the fund's performance, length of the fund's performance track record, and how closely the fund's strategies align with its benchmarks and peer groups. The Board concluded that the information it considered with respect to the fund's performance, as well as the other factors considered at the Meeting, supported the Board's approval of the continuation of the Advisory Contract.
Costs, Benefits, Economies of Scale, Fees and Expenses
The Board reviewed detailed information regarding the revenues received by the Adviser under the Advisory Contract and other direct and indirect benefits that the Adviser (and its affiliates) may have realized from its relationship with the fund. In considering soft-dollar arrangements, the Board noted that the Adviser may use brokerage commissions in connection with certain T. Rowe Price funds' securities transactions to pay for research when permissible, and the Board considered that the Adviser may receive some benefit from soft-dollar arrangements pursuant to which research is received from broker-dealers that execute the applicable fund's portfolio transactions.
The Board received information on the estimated costs incurred and profits realized by the Adviser from managing the T. Rowe Price funds. While the Board did not review information regarding profits realized from managing the fund in particular because the fund had either not achieved sufficient portfolio asset size or the Adviser had not recognized sufficient revenues to produce meaningful profit margin percentages, the Board concluded that the Adviser's profits were reasonable in light of the services provided to the T. Rowe Price mutual funds and ETFs.
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APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT (continued)
The Board also considered whether the fund benefits under the fee levels set forth in the Advisory Contract or otherwise from any economies of scale potentially realized by the Adviser. Under the Advisory Contract, the fund pays the Adviser an all-inclusive fee, which is based on the fund's average daily net assets. The all-inclusive fee includes investment management services and provides for the Adviser to pay all of the fund's ordinary, recurring operating expenses except for interest and borrowing expenses, taxes, brokerage commissions and other transaction costs, fund proxy expenses, and any nonrecurring extraordinary expenses that may arise. The Adviser has generally implemented an all-inclusive fee structure in situations where a fixed total expense ratio is useful for purposes of providing certainty of fees and expenses for the fund's investors and such a fee structure is typically used by other ETFs offered by competitors. The all-inclusive fee rate is determined based upon an evaluation of the particular strategy and a competitive analysis of the actively managed ETF industry. In addition, the assets of the fund are included in the calculation of the group fee rate, which serves as a component of the management fee rate for many T. Rowe Price mutual funds and declines at certain asset levels based on the combined average net assets of most of the T. Rowe Price mutual funds and ETFs (including the fund). Although the fund does not have a group fee rate component to its all-inclusive fee, its assets are included in the calculation because certain resources utilized to operate the fund are shared with other T. Rowe Price funds.
In addition, the Board noted that the fund potentially shares in potential economies of scale through the Adviser's ongoing investments in its business in support of the T. Rowe Price funds, including investments in trading systems, technology, and regulatory support enhancements, and the ability to possibly negotiate lower fee arrangements with third-party service providers. The Board concluded that the all-inclusive fee structure for the fund provides for a reasonable sharing of benefits from potential economies of scale with the fund and its investors.
Fees and Expenses
The Board was provided with information regarding industry trends in exchange-traded fund fees. The Board reviewed and considered information regarding the fund's actual total expense ratio, noting that the fund pays an all-inclusive fee. Among other things, the Board reviewed data for peer groups that were compiled by Broadridge, which compared: (i) actual management fees and total expenses of the fund with a group of competitor funds selected by Broadridge (Expense Group); and (ii) actual management fees and total expenses of the fund with a broader set of funds within the Lipper investment classification (Expense Universe). The Board considered the fund's actual management fee rate and total expenses (each of which generally reflect the fund's all-inclusive fee rate) in comparison with the information for the Broadridge peer groups. Broadridge generally constructed the peer groups by seeking the most comparable actively managed
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APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT (continued)
exchange-traded funds based on similar investment classifications and objectives, expense structure, asset size, and operating components and attributes and ranked funds into quintiles, with the first quintile representing the funds with the lowest relative expenses and the fifth quintile representing the funds with the highest relative expenses. The information provided to the Board indicated that the actual management fee rate ranked in the second quintile (Expense Group and Expense Universe), and the total expenses ranked in the second quintile (Expense Group and Expense Universe).
The Board was provided the fee schedules and other account fee information for certain comparable investment portfolios that are advised or subadvised by the Adviser and its affiliates, including separately managed accounts for institutional investors; subadvised funds; and other sponsored investment portfolios that are not registered investment companies, including collective investment trusts and pooled vehicles organized and offered to investors outside the United States. The fee schedules and account fee information, which are subject to change, may be negotiated under certain circumstances and may differ across regions. Management provided the Board with information about the Adviser's responsibilities and services provided to subadvisory clients and other types of clients, including information about how the requirements, economics and risks of the domestic and international businesses may differ from those of the proprietary mutual fund and ETF ("registered fund") business. The Board considered information showing that the Adviser's proprietary registered fund business is generally more complex from a business and regulatory perspective than its other domestic and international businesses and considered various relevant factors, such as the broader scope of operations and oversight, more extensive shareholder communication infrastructure, heightened business risks, and differences in applicable laws and regulations associated with the Adviser's proprietary registered fund business. In assessing the reasonableness of the fund's management fee rate, the Board considered the differences in the nature of the services required for the Adviser to manage its registered fund business versus managing a discrete pool of assets as a subadviser to another institution's mutual fund or for an institutional account and that the Adviser generally performs significant additional services and assumes greater risk in managing the fund and other T. Rowe Price funds than it does for institutional account clients, including subadvised funds.
On the basis of the information provided and the factors considered, the Board concluded that the fees paid by the fund under the Advisory Contract are reasonable.
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APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT (continued)
Approval of the Advisory Contract
As noted, the Board approved the continuation of the Advisory Contract. No single factor was considered in isolation or to be determinative to the decision. Rather, the Board concluded, in light of a weighting and balancing of all factors considered, that it was in the best interests of the fund and its shareholders for the Board to approve the continuation of the Advisory Contract (including the fees to be charged for services thereunder).
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1307 Point Street
Baltimore, Maryland 21231
Call 1-800-638-5660 to request a prospectus or summary prospectus; each includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing.
T. Rowe Price Investment Services, Inc.
ETF1193-051 08/26

Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.

Not applicable.

Item 9. Proxy Disclosures for Open-End Management Investment Companies.

Not applicable.

Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.

Remuneration paid to Directors is included in Item 7 of this Form N-CSR.

Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.

If applicable, see Item 7.

Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 13. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 15. Submission of Matters to a Vote of Security Holders.

There has been no change to the procedures by which shareholders may recommend nominees to the registrant's board of directors.

Item 16. Controls and Procedures.

(a) The registrant's principal executive officer and principal financial officer have evaluated the registrant's disclosure controls and procedures within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.

(b) The registrant's principal executive officer and principal financial officer are aware of no change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 18. Recovery of Erroneously Awarded Compensation.

Not applicable.

Item 19. Exhibits.

(a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is filed with the registrant's annual Form N-CSR.
   (2) Listing standards relating to recovery of erroneously awarded compensation: Not applicable.
   (3) Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(b)    A certification by the registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

T. Rowe Price Exchange-Traded Funds, Inc.
By

/s/ David Oestreicher

   
David Oestreicher
Principal Executive Officer
Date  August 19, 2026

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By

/s/ David Oestreicher

David Oestreicher
Principal Executive Officer
Date 

August 19, 2026

By

/s/ Alan S. Dupski

   
Alan S. Dupski
Principal Financial Officer
Date

August 19, 2026

T. Rowe Price Exchange-Traded Funds Inc. published this content on August 24, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 24, 2026 at 13:11 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]