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Active ETFs Surge Past Passive, and These Are in the Lead

Submitted by Nathan Reiff. Date Posted: 3/23/2026.

Key Points

• Actively managed ETFs have seen significant acceleration of inflows in the last year, potentially signaling a shift in how investors approach this space.
• Two active funds that may be worth a closer look include CGDV and TCAF, with a focus on dividend value and a GARP approach, respectively.
• Other passive funds may reflect some aspects of active ETFs, such as IVES, which is based on an index but tied to the views of technology analyst Dan Ives.
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Exchange-traded funds (ETFs) have traditionally been known for simplifying the investment process for non-professionals while keeping costs low through a passive management approach that tracks indices linked to different strategies. Oddly, actively managed ETFs—those not tied to an index and with portfolios curated by fund managers, which typically results in higher fees—have grown faster than their passive peers. Goldman Sachs reports that inflows into active ETFs were about four times stronger than those for passive ETFs last year.

Active ETFs can offer greater potential to capture alpha and often employ more complex, sophisticated strategies, which may appeal to more adventurous investors. Amid the flood of funds on the market today, three funds stand out: two actively managed ETFs and one passive ETF that closely resembles an active strategy.

CGDV Aims for Dividends and Price Appreciation Through an Active Approach

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The Capital Group Dividend Value ETF (NYSEARCA: CGDV) seeks dividend income above the average yield on U.S. stocks, focusing primarily on large, established domestic companies and secondarily on large international firms. CGDV's managers diversify the portfolio across many sectors, with information technology, industrials, and healthcare among the largest weightings.

With at least 90% of its equity assets invested in stocks whose issuers are rated investment grade or higher, CGDV aims to be a stable source of income even during market turbulence. Its active management gives the fund flexibility to adjust holdings as conditions change, which may appeal to investors seeking a defensive but responsive strategy.

Investors will find roughly 50 of the most solid dividend stocks in CGDV's basket, including names like Applied Materials Inc. (NASDAQ: AMAT) and Microsoft Corp. (NASDAQ: MSFT).

With an expense ratio of 0.33%, CGDV is more expensive than some passive dividend ETFs. However, its one-year return of nearly 21%, combined with a dividend yield of 1.31%, may justify the higher cost for some investors.

TCAF's Core Equity Approach Combines Big Names With Lesser-Knowns

The T. Rowe Price Capital Appreciation Equity ETF (NYSEARCA: TCAF) uses a core equity approach and targets stocks based on growth-at-a-reasonable-price (GARP) principles. The goal is to combine attractive return potential with relatively lower risk versus the broader market. TCAF's managers are not constrained by market-cap or other metric limits; instead, they build the portfolio in a bottom-up fashion by identifying individual companies they view as fundamentally strong.

The result is a portfolio of roughly 100 companies screened for fundamentals, historical performance, and growth potential. Investors might use TCAF as a core ETF to gain diversified exposure to many of the largest U.S. stocks for an expense ratio of 0.31%. Mixed in are some firms that may be less familiar to retail investors, such as pharmaceutical distributor Cencora Inc. (NYSE: COR).

All told, this basket of names returned just over 10% in the past year, slightly below the broader market. Still, TCAF has seen a notable surge in inflows over the last year, including nearly $1.9 billion from institutional investors, which may make it worth a closer look for potential future gains.

A Passive Fund That Mimics an Active Approach

The push toward actively managed funds appears to have influenced some passive ETFs as well. Consider the Dan Ives Wedbush AI Revolution ETF (NYSEARCA: IVES), a passive ETF that tracks an index of AI-related technology companies. The index is tied to Dan Ives, a prominent technology analyst at Wedbush Securities, and reflects his convictions about opportunities in the growing AI sector.

For an expense ratio of 0.75%—higher than most passive funds—investors gain exposure to an index based on Ives' selections.

Many of the roughly 30 holdings are well-known tech names that investors can access through other, more traditional ETFs. IVES' distinct weighting and multi-cap approach, however, may differentiate its portfolio from those alternatives.

This fund may appeal to investors who follow Dan Ives' analysis and share his optimism about AI-driven growth.

Launched in June 2025, IVES does not yet have a long performance record, but it has already attracted nearly $1 billion in assets under management and trades actively, with a one-month average trading volume exceeding 500,000 shares.