How should investors think about active exchange-traded funds (ETF)? In their February 2026 paper entitled "The Fast-Growing Market of Active ETFs", Rachel Li and Nadia Winn review the state of active ETFs. They consider only ETFs offered by investment companies registered under the Investment Company Act of 1940. They identify active versus passive ETFs based on fund manager responses on SEC forms. Using assets under management (AUM), holdings and expense ratio data for the specified ETFs from SEC filings and fund tracking data from Morningstar during 2020 through 2024, they find that:
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