Why First-Mover Advantage Matters for the Best Active ETFs

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FDG
KORP

The ETF industry has been growing for decades, but its spike, and the spike of active ETFs particularly in recent years, is hard to overstate. 2026 has seen continued record-setting pace for ETFs, with active ETFs contributing 80% of launches YTD as of May. That widening pool challenges investors to find the best ETFs.Key Takeaways: Active ETFs have grown massively in recent years, driving some 80% of YTD launches as of May. When assessing those funds as options, however, not many have that key three-year track record. First-mover advantage among active ETFs can help find enduring, durable performance where it counts. Certainly, performance comes first. What happens, however, when a fund only has limited performance data? Especially in the active ETF space, track record can say a lot about an asset manager’s approach and its rate of success. That’s why a first-mover advantage can prove a decisive one when it comes to finding the best ETFs. Take, for example, a fund like the American Century Focused Dynamic Growth ETF (FDG C+). FDG launched back in 2020 and has outperformed the ETF Database Large Cap Growth Equities category average over the last five-, three-, and one-year periods. Over the last three years, it has returned 27.7%, compared to the average’s 18.45%. VettaFi recently sat down with American Century Investments head of ETF product and strategy Sandra Testani to discuss. She expanded on the strength of that first mover advantage in the active space. About 60% of the more than 2,000 active ETFs on the market lack a three-year track record, she said. She emphasized the “seasoning” of the issuer’s active ETFs, by contrast, like the American Century Diversified Corporate Bond ETF (KORP B-). “When American Century launched KORP in 2018, the total U.S. active ETF market was valued at just $500 million,” she said. “Today, that market has exploded to approximately $1.8 to $1.9 trillion in the U.S. alone.” The fund, she added, has a 5-star rating from Morningstar. That backs up its status as one of the longest operating and largest active corporate bond ETFs. KORP’s status among the top ETFs in the active corporate bond space includes its outperformance versus the ETF Database Corporate Bond ETFs category average in that time. See more: American Century’s Testani on How to Beat Concentration Risk Investors may be well advised to look to first-mover advantage when looking for the best strategies. Those funds not only can back up their strategies with performance, but also can claim the managerial experience to boost it further. For more news, information, and analysis, visit the Core Strategies Content Hub.

Why First-Mover Advantage Matters for the Best Active ETFs

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