Active ETFs Unleashed: How Top Global Funds Are Rewriting Portfolio Strategy in 2026
Active ETFs aren't just surviving—they're thriving. Forget the passive-only dogma; today's leading funds deploy tactical maneuvers that static indices can't match.
Global managers pivot faster than ever, capitalizing on real-time market dislocations. They bypass traditional fund structures, slashing costs while maintaining precision exposure across sectors and regions.
These funds cut through market noise, targeting specific alpha opportunities that broad benchmarks miss entirely. The strategy? Aggressive sector rotation, dynamic risk management, and tactical asset allocation—all wrapped in ETF efficiency.
Portfolio diversification gets a 2026 upgrade. Managers blend geographies, industries, and market caps with surgical precision, avoiding the bloated holdings that drag down performance. It's active management without the traditional baggage—unless you count the occasional management fee that still somehow exceeds the GDP of a small nation.
The result? A new breed of ETF that behaves more like a hedge fund than a tracking instrument. They're not for the faint-hearted, but for investors tired of settling for market-average returns while paying for superstar management, the active ETF revolution just became impossible to ignore.
Structural Advantages and the Re-allocation of Global Capital
The migration of assets from mutual funds and passive index trackers into active ETFs is not merely a preference for a different vehicle but a response to the inherent limitations of traditional indexing in a top-heavy market. By the end of 2024, the “Magnificent Seven” stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—exerted an outsized influence on broad market returns, leading to a high degree of concentration risk. Active managers in 2025 have successfully differentiated themselves by identifying alpha-generating opportunities outside these mega-cap giants, often finding winners in industrials, healthcare, and international consumer staples. The flexibility to underweight technology and overweight defensive sectors during periods of valuation stress has proven to be a critical driver of relative outperformance.
The table above illustrates the significant penetration of active strategies within the world equity and bond segments. Notably, world equity assets are almost evenly split between active and passive management, suggesting that investors place a higher premium on active selection when navigating complex international markets where information asymmetries and idiosyncratic risks are more prevalent. In 2025, active ETFs captured $374.3 billion in net inflows during the first three quarters alone, surpassing the total inflows of the previous three years combined.
Elite Core Global Equity Strategies: JGLO and CGGO
For investors seeking a singular vehicle for global equity exposure, the JPMorgan Global Select Equity ETF (JGLO) and the Capital Group Global Growth Equity ETF (CGGO) have emerged as the premier choices. These funds represent a new generation of active ETFs that combine the depth of global research departments with the liquidity and transparency of the ETF wrapper.
JPMorgan Global Select Equity ETF (JGLO)
JGLO is designed as a core portfolio solution, investing in high-conviction stocks across both developed and emerging markets. The fund is managed by a team that integrates environmental, social, and governance (ESG) factors into its fundamental analysis, seeking companies with robust capital structures and durable competitive advantages. In late 2025, JGLO earned a Gold Medalist Rating from Morningstar, reflecting its consistent ability to generate risk-adjusted returns.
The fund’s performance in 2025 was bolstered by strategic overweight positions in media, retail, and utilities, while it remained cautious on the technology software sector due to elevated valuations. Throughout the year, JGLO demonstrated the value of active management by pivoting into defensive names like Walmart and American Express as volatility increased in the tech sector. By November 2025, the fund had managed to mitigate the downside risks associated with US-China trade tensions and potential tariff policies, which weighed heavily on passive global indices.
JGLO’s holdings are concentrated in high-quality global leaders. While it holds prominent US tech names, its active mandate allows it to shift weightings based on regional economic catalysts, such as fiscal stimulus in Europe or industrial recovery in Southeast Asia.
Capital Group Global Growth Equity ETF (CGGO)
The Capital Group Global Growth Equity ETF (CGGO) offers a different but equally compelling active approach. Capital Group, one of the world’s largest investment organizations, utilizes a multi-manager system where the fund’s assets are divided among several portfolio managers with diverse investment styles. This approach is intended to provide a “smoother” ride for investors by blending growth-oriented and value-conscious perspectives within a single fund.
CGGO distinguishes itself with a rigorous geographic mandate, typically investing at least 40% of its assets outside the United States. This ensures that the fund provides true global exposure rather than being a US-centric portfolio with minor international trimmings. In 2025, CGGO focused on companies with strong global supply chains and those benefiting from the secular growth of digital transformation and healthcare innovation.
The geographic distribution of CGGO in 2025 was a significant factor in its resilience. While US markets faced headwinds from interest rate uncertainty, European and Asian holdings provided a hedge, particularly companies like Taiwan Semiconductor Manufacturing (TSMC) and ASML, which are central to the global AI hardware ecosystem. CGGO’s expense ratio of 0.47% is highly competitive for a fund that provides such comprehensive international research coverage.
Factor-Based Diversification: The Quantitative Active Paradigm
A burgeoning segment of the active ETF market involves quantitative-active strategies, often referred to as “Smart Beta” or factor-based investing. These funds do not rely on traditional portfolio managers’ qualitative judgments but instead use algorithmic models to select and weight securities based on historical drivers of return, such as value, size, profitability, and momentum. Dimensional Fund Advisors (DFA) and Avantis Investors are the primary architects of this space.
Avantis All Equity Markets ETF (AVGE) vs. Dimensional World Equity ETF (DFAW)
In 2025, the debate between AVGE and DFAW reached a peak as both funds surpassed significant AUM milestones. These funds act as “total market” solutions, providing exposure to thousands of stocks globally with a deliberate tilt toward smaller, cheaper, and more profitable companies.
AVGE is noted for its “spicier” or more aggressive tilt toward profitability and cash flow. The Avantis team is flexible in its implementation, often including highly profitable stocks even if they are not considered traditional “value” plays. This approach aims to maximize total expected return by capturing multiple factors simultaneously. In contrast, DFAW is perceived as a more “style-pure” variant. Dimensional’s methodology first sorts the market by price-to-book (value) and then overlays a profitability screen, ensuring that its value bucket does not drift into growth territory.
The structural difference is noteworthy: DFAW operates as a “fund of funds,” holding other Dimensional ETFs to achieve its target allocation. This allows for precise control over factor loadings across US, international, and emerging markets. AVGE, while also holding other Avantis funds, is managed with a more holistic daily oversight that considers valuation shifts in real-time. For a professional allocator, the choice between the two often comes down to a preference for Dimensional’s longer institutional track record versus Avantis’s slightly lower fees and more aggressive profitability tilts.
Specialized Growth and Defensive Value: WRND and FEGE
Beyond the CORE global equity funds, 2025 has seen the rise of active ETFs that target specific economic themes or defensive characteristics. These funds allow investors to “flavor” their portfolios based on their outlook for global innovation or risk.
NYLI Global Equity R&D Leaders ETF (WRND)
The WRND ETF represents a thematic active strategy that focuses on companies with high research and development (R&D) intensity. The management team believes that R&D spending is a critical indicator of a company’s ability to sustain competitive advantages and drive long-term capital appreciation. In 2025, this strategy was particularly effective, as the global economy continued to reward innovation in biotechnology, semiconductors, and green energy.
WRND gained 23.25% YTD through late 2025, significantly outperforming the broader FTSE All-World Growth Index. Its portfolio is concentrated in the technology and industrial sectors, but it maintains a global mandate that includes significant allocations to European and Asian innovators.
First Eagle Global Equity ETF (FEGE)
On the defensive end of the spectrum, the First Eagle Global Equity ETF (FEGE) utilizes a “margin of safety” philosophy. Launched in late 2024, FEGE seeks to invest in companies with strong balance sheets and resilient business models that are trading at a discount to their intrinsic value. A unique feature of FEGE is its inclusion of gold-related securities and miners, which serves as a “potential hedge” against currency debasement and geopolitical instability.
FEGE’s portfolio reflects a stark contrast to growth-heavy global funds, with prominent positions in materials and healthcare. This defensive posture is intended to provide downside protection during market corrections, a strategy that appealed to risk-averse investors in the volatile months of late 2025.
Active Fixed Income: The Search for Yield and Stability
The active ETF revolution has not been confined to equities. In 2025, active fixed-income ETFs saw an explosion in growth, representing nearly 39% of all new fixed-income ETF flows. This trend is driven by the realization that bond indices are inherently flawed; they weight issuers by their total debt, meaning a passive bond index fund is often most heavily invested in the most indebted entities. Active bond managers, conversely, can adjust duration and credit quality based on interest rate forecasts and credit analysis.
Multi-Sector and Ultrashort Bond Strategies
The JPMorgan Income ETF (JPIE) and the Fidelity Total Bond ETF (FBND) are leading examples of active multi-sector bond funds that have successfully navigated the shifting rate environment of 2025. JPIE focuses on income generation by rotating between corporate bonds, mortgage-backed securities, and high-yield debt. Meanwhile, in the ultrashort space, the Janus Henderson AAA CLO ETF (JAAA) became a “mint” for fresh capital, attracting $9 billion in 2025 as investors sought high yields from collateralized loan obligations with floating rates and minimal interest rate risk.
The preference for active bond management is also a response to the “tumultuous” first nine months of 2025, where inflation concerns and central bank pivots created significant volatility in the treasury markets. Active managers were able to shorten duration or MOVE into high-yield debt to protect capital and capture income, whereas passive bond index investors were forced to ride out the fluctuations.
The Rise of Thematic and Specialty Active ETFs
In addition to broad equity and debt exposure, active ETFs are increasingly being used to access specialized market segments that are difficult to replicate via traditional indices.
Cannabis and Infrastructure: MSOS and Emerging Themes
The AdvisorShares Pure US Cannabis ETF (MSOS) remains the first and largest actively managed ETF focused solely on the US cannabis industry. In August 2025, MSOS recorded a staggering one-month performance of 43.06%, driven by regulatory shifts and restructuring of tax laws that favored multi-state operators. Active management in this space is critical because cannabis companies face unique legal and financial hurdles that require constant monitoring and tactical trading.
Similarly, active infrastructure funds and environmental thematic ETFs like the Impax Global Environmental Markets ETF have gained traction. These funds allow investors to align their capital with the global energy transition while benefiting from active managers who can distinguish between profitable green technology leaders and speculative start-ups.
High-Yield and Municipal Active ETFs
Vanguard, traditionally known for its passive index funds, made significant strides in the active space in 2025 with the launch of the Vanguard High-Yield Active ETF (VGHY). This fund leverages Vanguard’s immense scale and fixed-income expertise to offer an active corporate bond strategy with an expense ratio of just 0.22%—one of the lowest in the active high-yield category. In the municipal space, the abrdn Ultra Short Municipal Income Active ETF (AMUN) has become a preferred tool for high-net-worth investors seeking tax-exempt income with low volatility.
Market Communication and Visibility: Reaching the Modern Investor
The success of these active ETFs is not solely due to their structural advantages or performance; it is also a result of a sophisticated marketing and visibility evolution. ETF issuers have recognized that the modern investor—whether a retail trader on a mobile app or an institutional RIA—consumes information differently than in the mutual fund era.
Data from late 2025 suggests that the most successful ETF launches utilized highly optimized digital communication strategies. Research into click-through rates (CTR) for financial products showed that headlines promising “Easy-to-digest” information, such as “Top 10 Active ETFs for 2025” or “5 Ways Active ETFs Reduce Tax Liability,” outperformed traditional academic WHITE papers. The industry has embraced the “Curiosity Gap” and “Benefit-driven” headlines to drive engagement. Furthermore, the transition to “E-E-A-T” (Experience, Expertise, Authoritativeness, and Trustworthiness) principles in digital content has allowed firms like Capital Group and JPMorgan to maintain a dominant presence in search results, effectively bridging the gap between high-level institutional analysis and accessible retail education.
This focus on digital visibility is a response to the “Zero-Click Buyer Journey,” where investors often make preliminary decisions based on snippets and high-level data before ever reading a full prospectus. The transparency of the active ETF wrapper—offering daily holdings and real-time intraday pricing—perfectly complements this demand for immediate, verifiable information.
Institutional and Retail Adoption: The Future of Models
The growth of active ETFs is increasingly fueled by their inclusion in “Model Portfolios.” Financial advisors are moving away from selecting individual stocks or high-cost mutual funds in favor of pre-constructed models that use active ETFs for core exposure. These models provide a “best of both worlds” approach: the structural efficiency of the ETF and the tactical alpha-seeking potential of active management.
Surveys conducted in late 2025 reveal that 97% of professional investors plan to increase their exposure to active ETFs in the coming year. Strikingly, over half of these allocators (53%) plan to sell their existing index-based ETF holdings to fund these new active positions. This indicates a profound shift in market sentiment: investors are no longer satisfied with simply “owning the market”; they are seeking to “beat the market” through professional oversight, especially in a volatile macroeconomic environment characterized by lingering inflation and policy uncertainty.
Tactical Diversification and Risk Management in 2025
One of the most valuable second-order effects of the active ETF boom is the emergence of “risk-managed” diversification. Beyond traditional equity and bond funds, active ETFs are now offering “Defined Outcome” and “Buffered” strategies. These funds use options to provide a level of downside protection (e.g., a 10% or 15% buffer) in exchange for a cap on upside gains.
In 2025, First Trust and Calamos became leaders in this category, launching dozens of “autocallable” and “buffered” ETFs designed for risk-averse investors who wanted to stay in the market but feared a significant correction. These funds have proven to be a popular “middle ground” between cash and full equity exposure, especially for retirees and pension funds navigating the uncertainties of 2025.
Emerging Markets and the Geographic Alpha
While the US stock market remained resilient through 2025, active global managers found significant alpha in emerging markets (EM) and developed international stocks. Emerging markets “roared back to life” in late 2025, with countries like South Africa and Peru leading the gains. Active managers in funds like the Capital Group New Geography Equity ETF (CGNG) were able to capture these regional surges by overweighting high-growth areas while avoiding the regulatory “headwinds” associated with some of the larger EM economies.
The active management of currency risk also became a major performance differentiator in 2025. As the US dollar fluctuated against the Euro and the Yen, global active ETFs that utilized currency hedging—such as those from PIMCO and JPMorgan—were able to protect returns for US-based investors, a feat that passive unhedged international ETFs could not achieve.
Final Synthesis and Recommendations for Professional Allocators
The strategic landscape of 2025 has cemented the active ETF as the primary vehicle for achieving sophisticated, diverse global exposure. For a professional portfolio, the core-satellite approach utilizing these vehicles provides the most robust path forward:
The future of global investing is active, transparent, and structurally efficient. By moving beyond the binary “active vs. passive” debate and embracing the “active ETF” as a sophisticated hybrid, investors can construct portfolios that are not only more diversified but are also more resilient to the idiosyncratic challenges of the modern global economy. The data from 2025 is clear: the active ETF wrapper is the next frontier of investment innovation, and its adoption is the hallmark of a forward-thinking, professionally managed global strategy.
