Active ETFs Catch a Wave of Investor Interest

Yahoo

7 hours ago

Rising fund inflows underscore a broader shift in investor preference toward actively managed ETFs. According to JPMorgan, over 39% of ETF flows in 2025 have been directed toward active strategies.
Supporting this trend, 34% of ETF allocations in April went to active ETFs, per ETF Action, as quoted on Investopedia. This highlights a broader shift in investor preference, with investors increasingly moving away from passive ETFs in favor of active approaches.
Let's take a closer look at the factors behind the rise of active ETFs.
Per JPMorgan, of all the fund launches this year, active funds accounted for 94% of all ETF launches in 2025. Last month, 46 active ETFs were launched, injecting momentum into the industry.
Deloitte's Center for Financial Services forecasts that U.S. active ETF assets under management (AUM) will soar from $856 billion in 2024 to $11 trillion by 2035, marking a 13-fold increase. By that time, active ETFs are expected to represent 27% of total ETF AUM.
Per ETF Trends, continued innovation within ETFs is expected to sustain strong interest in active ETFs. Over the past year, inverse ETFs, leveraged ETFs and options-based ETFs have entered the market, expanding the options available to advisors and investors.
As investors become more aware and performance data on active ETFs becomes more widely available and transparent, demand and fund inflows into these products are expected to accelerate. According to Deloitte, one of the most important factors driving the growth in actively managed funds is investors shifting away from mutual funds toward ETFs, induced by lower ETF expense ratios for comparable strategies.
This year has been marked by volatility, which has created an environment suitable for active managers to exploit opportunities and potentially outperform the passive funds. Investors are turning bullish and becoming less sensitive to uncertainties caused by tariffs. According to YCharts, the percentage of investors who are bullish on the market has increased since late February.
The adoption of active ETFs is expected to grow among both institutional and retail investors. Per Investopedia, the recent surge in active fund inflows is largely driven by retail investors, especially younger and more aggressive traders.
Below, we highlight a few active funds for investors to consider.
JPMorgan Equity Premium Income Fund employs a covered call strategy, selling call options on top of a stock portfolio to generate income in the form of option premiums. The fund has amassed an asset base of $39.79 billion and charges an annual fee of 0.35%.
JEPI has a one-month average trading volume of about 5.05 million shares. JEPI generates income through a combination of selling options and investing in U.S. large-cap stocks.
JPMorgan Equity Premium Income Fund has a dividend yield of 8.34%. JEPI has gained 1.74% over the past month and 6.74% over the past year.
JPMorgan NASDAQ Equity Premium Income ETF employs a covered call strategy, selling call options on top of a stock portfolio to generate income in the form of option premiums. The fund has amassed an asset base of $26.44 billion and charges an annual fee of 0.35%.
JEPQ has a one-month average trading volume of about 6.35 million shares. JEPQ generates income through a combination of selling options and investing in the tech-heavy Nasdaq-100.
JPMorgan NASDAQ Equity Premium Income ETF has a dividend yield of 11.58%. JEPQ has gained 3.63% over the past month and 8.49% over the past year.
iShares U.S. Equity Factor Rotation Active ETF seeks to outperform the investment results of the large and mid-capitalization U.S. equity markets by providing diversified and tactical exposure to style factors via a factor rotation model. The fund has amassed an asset base of $17.84 billion and charges an annual fee of 0.27%.
DYNF has a one-month average trading volume of about 1.94 million shares.
iShares U.S. Equity Factor Rotation Active ETF has a dividend yield of 0.88%. DYNF has gained 7.03% over the past month and 16.86% over the past year.
Capital Group Dividend Value ETF seeks to produce consistent income that exceeds the average yield of the S&P 500 by focusing on companies that pay dividends or have the potential to pay dividends. The fund has amassed an asset base of $17.09 billion and charges an annual fee of 0.33%.
CGDV has a one-month average trading volume of about 3.36 million shares. The fund has allocated about 78.5% of its assets to large-cap securities.
Capital Group Dividend Value ETF has a dividend yield of 1.50%. The fund has gained 6.09% over the past month and 14.91% over the past year.
Avantis U.S. Small Cap Value ETF seeks long-term capital appreciation by investing primarily in a diverse group of U.S. small-cap companies across market sectors and industry groups. The fund has amassed an asset base of $15.42 billion and charges an annual fee of 0.25%.
AVUV has a one-month average trading volume of about 830,000 shares.
Avantis U.S. Small Cap Value ETF has a dividend yield of 1.77%. The fund has gained 6.67% over the past month but has fallen 3.57% over the past year.
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iShares U.S. Equity Factor Rotation Active ETF (DYNF): ETF Research Reports
Avantis U.S. Small Cap Value ETF (AVUV): ETF Research Reports
JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports
Capital Group Dividend Value ETF (CGDV): ETF Research Reports
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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