Active exchange-traded funds (ETFs) are surging in both popularity and performance in 2026, as more investors opt for these funds over traditional passive ETFs. Experts are crediting this rise to the flexibility active managers have, allowing them to adjust portfolios to better navigate market swings. This trend, which started gaining traction after the introduction of the ETF rule in 2019, has led to active ETFs not only growing rapidly in number but also consistently outperforming their passive counterparts in key markets.
Impressive Active ETF Returns
One of the standout performers this year has been the Pimco Municipal Income Opportunities Active ETF (NASDAQ: MINO), which has become a case study in neutral market sentiment. As of January 24, 2026, MINO shows a 5.4:1 risk-reward setup, with a modest target gain of 1.5%, though its current price of $45.21 suggests a period of neutrality. Analysts point out that multi-timeframe analysis suggests the ETF is in a holding pattern, making it a prime candidate for a wait-and-see approach.
MINO’s performance is just one of many success stories. Active ETFs, with their inherent flexibility in asset allocation, have been able to outperform passive ETFs, even in volatile markets. Managers of these funds have the freedom to deviate from rigid index tracking, giving them an advantage in rapidly changing market conditions. This flexibility is proving to be a significant factor in their growing popularity.
American Century Investments is among the leaders in active ETFs, with funds like the Avantis U.S. Small Cap Value ETF (AVUV), which charges a competitive 0.25% fee. AVUV has amassed over $5.5 billion in assets under management (AUM) in the last year alone, pushing its total AUM above $20 billion. Over the past three months, the fund has posted a return of 12.1%, a strong performance fueled by active management strategies aimed at small-cap firms with value potential.
Global Expansion of Active ETFs
The appeal of active ETFs is not limited to the U.S. market. In South Korea, Timefolio Asset Management’s TIME Kospi Active ETF has delivered a 20.78% year-to-date return, significantly outperforming the Kospi index by over seven percentage points. This was achieved by increasing the weight of Hyundai to 6.14%, well above its standard representation in the index. Key holdings like Samsung Electronics and SK Hynix also contributed to the strong performance. Kim Nam-ho, the head of Timefolio’s ETF management division, noted that the early boost in Hyundai’s weight was based on expectations of a re-rating, which paid off handsomely.
Back in the U.S., the Global Blacksmith Active ETF, managed by Asset Plus Asset Management, has achieved a top-ranking 6.91% return year-to-date among S
