For years, investing with ETFs was limited to a simple promise: to faithfully track a stock index, at low cost, without asking too many questions. An effective approach as long as financial markets rise, but when the economic context becomes more challenging, and stock indices no longer have a clear direction, index management can sometimes show its limits.
Should we therefore give up on ETFs? Not necessarily, because there are also active ETFs whose offering has recently expanded. Less known, sometimes poorly understood, these listed funds no longer merely replicate a stock index passively.
Discover in this article everything you need to know about active ETFs, how they work, their advantages and drawbacks, how to use them and what they can bring to your investment portfolio.
By the end of this article, you will discover our 2026 selection of 4 active ETFs with all their characteristics and their 12-month performance.
You can invest in the ETFs presented in this article from one of the best stockbroking accounts, or one of the best PEA accounts if the tracker is eligible for this tax-advantaged wrapper. In any case, you should open an account with one of the best stockbrokers to enjoy a wide range of listed index funds, but also attractive fees, and tools and services that match your investor profile.
What is an active ETF?
To understand what an active ETF is, one must first revisit how a so-called “passive” ETF works. Contrary to common belief, the manager of a passive ETF does not decide the composition of the index it replicates. This responsibility lies with specialized firms dedicated to the creation and management of indices, completely distinct from ETF issuers.
Among the most well-known, there is Euronext for the CAC 40, S&P Dow Jones Indices for the S&P 500, MSCI for the MSCI World, but also FTSE Russell or Bloomberg. These players define the rules of selection, weighting and evolution of stock indices. Even when an index changes, such as the CAC 40 whose composition can be amended occasionally, these decisions belong to the index committee, not the ETF issuer.
The ETF issuer, for its part, simply replicates faithfully a stock index, under license, with no discretionary power over the selected securities. This is precisely where the break with an active ETF lies.
In short, an active ETF is therefore an ETF whose manager can choose the stocks or bonds in which it will invest; you will better understand the nuance in the comparison we make just after between active ETF and passive ETF.
The special case of semi-active ETFs (rules-based ETF)
Between the purely passive ETF and the truly active ETF there exists an intermediate category: semi-active ETFs, which may be a “rules-based” ETF or a structured ETF.
Their logic is specific. They do not rely on discretionary management, as no manager decides day by day which securities to buy or sell, but they do not simply replicate a classic index mechanically either. Their operation is entirely predetermined by a mathematical formula, defined at the creation of the ETF.
In most cases, these ETFs rely on a reference index (CAC 40, S&P 500, etc.), which they will adapt, transform or improve with the help of systematic rules. The added value therefore comes from the method itself, and not from human intervention. Once the rules are established, they apply automatically, with no freedom left for the manager to modify them along the way.
Covered call ETFs are a great example. They combine exposure to the equity market with a systematic strategy of selling call options on the stocks held in the portfolio. This mechanism allows for additional income, particularly interesting in markets without a clear trend, evolving in a trading range. In return, the upside potential is partially capped.
Examples of Covered Call ETFs
| Name of the ETF | ISIN | Covered call mechanism | Gain optimization mechanism | Gain cap |
| YieldMax Future of Defence Option Income UCITS ETF | IE000TAA0GK0 | The fund is actively managed and seeks to generate income by selling call options on the stocks held in the portfolio. The premiums from selling options represent the main source of income, with monthly distributions. | In addition to income generation, the fund aims for long-term capital appreciation through direct exposure to defense sector equities. | No explicit upside cap. The sale of options may nonetheless limit upside potential in exchange for the income generated. |
| JPM Nasdaq Equity Premium Income Active UCITS ETF | IE000U9J8HX9 | The fund implements a strategy of systematic selling of call options (covered calls) on equities and/or stock indices, in addition to a portfolio predominantly invested in large-cap US equities. | Gain optimization relies on a dynamically managed options overlay, aiming to generate steady income while reducing volatility and partially offsetting potential declines in the equity portfolio. | No predefined cap on gains. The fund may nevertheless forego part of the market’s upside potential due to the sale of call options. |
Another example with a new-type ETF: buffer ETFs, sometimes described as structured ETFs. Their objective is to partially protect the investor against market declines.
For instance, a buffer ETF with 10% protection will allow the investor to incur no losses as long as the reference index does not fall by more than 10%. If the market falls by 15%, the loss borne will be limited to the remaining 5%. Again, the trade-off is a cap on upside performance. These mechanisms also rely on systematic option strategies.
Examples of Buffer ETFs
| Name of the ETF | ISIN | Protection mechanism (buffer) | Gain cap |
| First Trust Vest U.S. Equity Buffer UCITS ETF – January 2026 | IE000MDKBOB3 | Protection against the first 10% drop of the S&P 500 index over a target annual period via a portfolio of FLEX options. The buffer is effective only if the ETF is held from the beginning to the end of the target period. | Participation in the rise of the S&P 500 capped at 14.10% net (13.26% after fees) over the target period. |
| iShares US Large Cap Deep Buffer UCITS ETF | IE000EOFR2K5 | Aims to provide protection against roughly -5% to -20% drawdowns of the S&P 500 over a quarterly earnings period, when the ETF is held from start to finish of the period. The protection is described as an “approximate margin of safety”. | Participation in the rise of the S&P 500 limited by an approximate cap, the exact level depending on each quarterly earnings period. |
As can be seen in the table above, the operation of buffer ETFs can vary significantly from one issuer to another. Some products are strictly time-bound, as with First Trust, where each ETF corresponds to a defined earnings period. This precise time frame offers, in return, great transparency on the protection mechanism and the gain cap.
Conversely, the iShares buffer ETF is reset each quarter, making its operation more adaptable but also less readable for the investor, who does not know in advance the exact parameters of future periods. Finally, note that at First Trust, a new equivalent ETF is issued in each period (for example in February) with a distinct ISIN code, confirming the temporary and sequenced nature of these products.
These semi-active ETFs thus offer a sophisticated alternative to traditional index management, delivering specific objectives: yield, protection, risk control, without tipping into discretionary active management.
Active ETF and Passive ETF: what differences?
An active ETF operates on a radically different logic. It does not seek to follow a predefined index, nor a mathematical logic, but relies on investment choices made directly by a manager within the management company that issues the ETF.
In other words, the manager does not replicate a predefined universe: he builds it.
That does not mean frantic management or daily trading. In the vast majority of cases, active ETF management remains structured, framed and relatively stable over time.
The manager can adjust weights, add or remove certain securities, modify sectoral or geographic exposure, according to his convictions and his market analysis, without being bound by the rules of an index.
Comparison table: passive ETF vs active ETF
| Characteristic | Passive ETF | Active ETF |
| Reference/Composition | External index | No obligation to follow an index, discretionary management |
| Who decides the composition? | Index creator | ETF manager |
| Role of the issuer | Replication | Management and allocation |
| Objective | Follow the performance of the index | Outperform, protect or adjust exposure |
| Portfolio evolution | dictated by the index | Discretionarily decided |
| Degree of flexibility | None | High |
Comment from Marc:
Be careful, index ETFs are known for their transparency, but this is not always the case with active ETFs. The AMF issued a recommendation in 2024 urging issuers to increase transparency with active ETFs.
Active ETF and traditional UCITS: what differences?
Many investors are already familiar with classic UCITS, widely used, notably within life insurance and the PER.
A UCITS is based on traditional active management with:
- a manager who selects the securities;
- a manager who rebalances the portfolio;
- a manager who aims to beat a benchmark index.
From this point of view, the active ETF is the closest to a traditional UCITS in its operation.
The big difference lies in the format: the active ETF is continuously quoted on an exchange, which implies a more technical mechanism, whereas a UCITS is typically valued once a day.
Another important point: active ETFs often offer substantially lower fees, while maintaining a management logic very close to that of a classic UCITS.
Active ETFs: what are the advantages and drawbacks for the investor?
Be careful, active ETFs have advantages but also drawbacks, and one should not be swayed by the word “active” which may seem more attractive than “passive.” Both types of ETFs are interesting.
Discover the advantages and disadvantages to better identify whether an active ETF fits your needs.
The advantages of active ETFs
- Potential for outperformance: they aim to do better than the reference indices.
- Better adaptation to difficult markets: management can adjust during periods of volatility or uncertainty.
- Access to targeted expertise: the investor benefits from the manager’s know-how.
- Greater flexibility: the portfolio is not bound by index rules.
- Maintained ETF format: liquidity, transparency and accessibility remain on the table.
The drawbacks of active ETFs
- Risk of management error: the manager can be wrong, where indices have proven robust over the long term.
- Outperformance not guaranteed: an active ETF can underperform its reference index.
- Higher fees: active management often entails higher costs than passive ETFs.
- Strategy sometimes complex: the operation can be less transparent for the investor.
- Dependency on the manager’s style: an approach that works well today may penalize tomorrow.
Comment from Marc:
Active ETFs are not intended to replace passive management, but to complement it. Their integration into a portfolio depends first and foremost on the trust placed in the manager and on understanding his strategy. This requires more analytical work: consult the factsheets, the DICI and the prospectuses directly on the issuer’s site, understand who manages the fund and by what methodology. Active ETFs are therefore more suited to somewhat more experienced investors, willing to spend time on research before investing.
Our selection of the 4 best active ETFs for 2026
For 2026, we have established a selection of 4 active ETFs chosen primarily based on their recent performance and differentiating strategies.
This selection includes three equity ETFs, exposed to various themes or regions, but also an active bond ETF, to show that active management is not limited to stocks: it can also be relevant on interest-rate markets, bonds, and even (more rarely) real estate and commodities.
Below are the essential characteristics of each of these active ETFs.
1. JPMorgan Japan Research Enhanced Index Equity (ESG) UCITS ETF – EUR Hedged
ISIN : IE000QGWZZO0
- Actively managed Japanese equity ETF
- Objective: to outperform the MSCI Japan (Net Total Return) over the long term
- Bottom-up fundamental selection with overweighting of high-potential stocks
- Improved indexing approach, within a controlled risk framework
- Inclusion of ESG criteria (fund SFDR Article 8)
- Euro/yen currency risk hedging
- Ongoing charges: 0.25%
- Income accumulation
Rationale : exposure to the Japanese market combining disciplined indexing and active management, with a qualitative and ESG tilt.
12-month performance of the JPMorgan Japan Research Enhanced Index Equity ETF
2. ETF ARK Artificial Intelligence & Robotics UCITS ETF – USD
ISIN : IE0003A512E4
- Theme-based equity ETF actively managed
- Exposure to companies involved in artificial intelligence, robotics and automation
- Concentrated conviction management with a focused selection of growth stocks
- Strong focus on innovation and disruptive technologies
- No strict benchmark index
- Ongoing charges: 0.75%
- Income accumulation
Rationale : an offensive active ETF designed to capture the long-term potential of major technological breakthroughs.
12-month performance of the ARK Artificial Intelligence & Robotics ETF
3. ETF iShares Europe Equity Enhanced Active UCITS ETF
ISIN : IE00000EF730
- Actively managed European equity ETF
- Objective: improve the performance of the MSCI Europe
- Stock selection via systematic quantitative models
- Analysis based on three pillars: fundamentals, market sentiment and macroeconomic factors
- Management based on algorithms only (no human intervention)
- Fund SFDR Article 8 (ISR/ESG)
- Ongoing charges: 0.25%
- Income accumulation
Rationale : an active yet disciplined approach to European equities, halfway between a passive ETF and traditional active management.
12-month performance of the iShares Europe Equity Enhanced Active
4. Fidelity ESG USD EM Bond UCITS ETF – INC (Euro Hedged)
ISIN : IE0007L3IJF6
- Actively managed bond ETF
- Exposure to sovereign and quasi-sovereign emerging market bonds
- Dollar-denominated issues, with euro currency risk hedging
- Systematic integration of ESG criteria (SFDR Article 8)
- Objective: income generation and capital growth
- Diversified portfolio (over 200 bonds)
- Ongoing charges: 0.50%
- Income distributions
Rationale : to show that active ETF management can be relevant for bonds as well, especially to optimize the risk/return trade-off.
12-month performance of the Fidelity ESG USD EM Bond
How to invest in active ETFs in practice?
In practice, investing in an active ETF does not differ fundamentally from buying any classic ETF. They are accessible through a securities account with a stockbroker.
However, active ETFs being newer and more innovative than traditional CAC 40, MSCI World or S&P 500 ETFs, it is essential to check in advance their availability with your stockbroker.
Whether you are a client of XTB, Trade Republic, IG, eToro or another online broker, a search via the ETF finder is essential. Trading platforms such as Freedom24 or Interactive Brokers typically offer them without difficulty.
Note that the share price for these ETFs remains very accessible, often ranging from a few euros to a few tens of euros. It is therefore not necessary to use fractional ETF orders to invest, unlike some more expensive assets.
Are active ETFs eligible for the PEA?
Active ETFs can be eligible for the PEA, but they remain extremely rare. We found only 17, including 5 equity ETFs and 12 bond ETFs.
The vast majority of active ETFs are very new, most having been launched in 2025, including 5 in December 2025, thus with very little history.
One notable exception, however: the Osiam Europe ESG Machine Learning ETF, created in 2012, which shows +37.56% over 3 years and +46.74% over 5 years.
Past performance is not indicative of future results. Investing in equities involves capital risk.
All information provided is, by nature, generic. It does not take into account your personal situation and does not constitute personalized investment recommendations for making transactions and cannot be equated with investment advice, nor any inducement to buy or sell financial instruments. The reader is solely responsible for the use of the information provided, with no recourse against Cafedelabourse.com’s publishing company. The publisher’s liability cannot be engaged under any circumstances in case of error, omission or inappropriate investment.
