First-mover edge guides investors in active ETF picks

About 60% of more than 2,000 active ETFs lack a three-year track record, and active ETFs accounted for 80% of U.S. ETF launches in 2026 through May. Rapid issuance has increased the number of active strategies available before multi-year performance records are established.

Sandra Testani, head of ETF product and strategy at American Century Investments, noted the large share of newer products and said that earlier entrants provide longer performance histories for evaluation. She pointed to the three-year track record threshold as a common reference point for investors and advisers.

American Century cites specific examples of earlier launches. The American Century Focused Dynamic Growth ETF (FDG), introduced in 2020, returned 27.7% over the past three years, compared with a large-cap growth category average of 18.45%. FDG also outperformed the category average over one- and five-year spans.

The American Century Diversified Corporate Bond ETF (KORP) began trading in 2018. Testani recalled that “when KORP began trading, the total U.S. active ETF market was valued at just $500 million.” The active ETF market has since expanded to roughly $1.8 to $1.9 trillion in the U.S. KORP holds a five-star Morningstar rating and ranks among the longer-running and larger active corporate bond ETFs; its returns have exceeded the corporate bond ETF category average over its operating history.

Fund ratings and category comparisons are available for many products and are used by some investors and advisers to compare offerings. Industry data show a surge in active ETF launches in 2026 through May, increasing the proportion of funds with limited operating histories.

ETFs have broadened from primarily passive instruments to include a wide range of active strategies in recent years. The growth in active ETF issuance has produced many products without multi-year track records, while a subset of earlier entrants now provides longer-term performance data for investors to review.