A typical active share ETF charges 0.85% a year, against 0.04% to 0.18% for IVV, VAS and VGS. On $100,000 over 20 years that gap can cost more than $40,000. Over five years to 30 September 2026, only 2 of 15 active global share ETFs beat VGS, and none of 9 active Australian share ETFs beat VAS. A good active fund is possible, but you need to judge it carefully.
The ASX active ETF line-up
An active ETF has a fund manager choosing the shares, aiming to beat the market. An index ETF simply buys every company in an index. Active ETFs have grown quickly: at 30 September 2026 there were 156 ETFs on Australian exchanges with "Active" in their name, managing $65.5 billion, about 17% of all ETF money. They took in a net $789 million in September.
The flows are concentrated. IACT, the iShares US Factor Rotation Active ETF, took in $177 million, the most of any active fund and the 11th most of any ETF. At the other end, V1AC saw $143 million leave and HYGG about $36 million.
| Active ETF | Style | Fee | Size | 1 year | 3 years | 5 years |
|---|---|---|---|---|---|---|
| HYGG Hyperion | Global growth | 0.70% | $3,366m | −5.9% | +76.9% | +53.0% |
| V1AC Vinva | Global, quantitative | 0.89% | $3,858m | −4.2% | +37.0% | +35.4% |
| VVLU Vanguard | Global value | 0.28% | $1,404m | +16.9% | +55.6% | +76.0% |
| LPGD Loftus Peak | Global disruption | 1.20% | $884m | +16.5% | +111.9% | +120.8% |
| IACT iShares | US factor rotation | 0.45% | $520m | +11.3% | n/a | n/a |
| JREG JPMorgan | Global, research enhanced | 0.30% | $79m | +9.7% | +61.0% | n/a |
| PIXX Platinum | Global, contrarian | 1.10% | $58m | −2.9% | +15.8% | +20.6% |
| AASF Airlie | Australian shares | 0.78% | $792m | +1.6% | +25.0% | +30.6% |
| Index yardsticks | ||||||
| VGS | Global index | 0.18% | $18,679m | +10.1% | +64.1% | +74.6% |
| IVV | S&P 500 index | 0.04% | $14,871m | +10.1% | +69.5% | +87.8% |
| VAS | Australian index | 0.07% | $26,675m | +2.2% | +36.0% | +36.7% |
Cumulative total returns including distributions to 30 September 2026. Some funds carry a track record from before they listed. Source: TMX Australia monthly funds report.
Check 1: the fee hurdle
Every active fund starts the race behind. The median active share ETF charges 0.85% a year. Against VGS at 0.18%, the manager has to beat the market by about 0.67% a year, every year, just to break even. Against IVV at 0.04%, the hurdle is more than 0.8%.
What you pay each year
What fees cost on $100,000 over 20 years
Some active funds also charge a performance fee when they beat a target, which comes on top of the management fee. Always read the product disclosure statement (PDS) for the full cost.
Check 2: compare it with the right index
An active fund should be judged against the cheap index fund you would otherwise buy. For a global share fund that is VGS (or IVV if the fund is mostly US shares). For an Australian share fund, it is VAS. Here is how the active ETFs with a long record have done against those yardsticks.
How many active share ETFs beat the index fund
Over three years, 7 of 27 active global funds beat VGS, helped by managers who held big US technology winners. Over five years the number drops to 2 of 15. In Australian shares, not one of the active ETFs with a three or five-year record beat VAS.
Active return minus VGS, in percentage points
Active return minus VAS, in percentage points
For the full scorecard across shares and bonds, see active vs passive ETFs: the data.
Check 3: is the track record long enough?
Many active ETFs are too new to judge. IACT listed in June 2025, so it has only one year of returns to judge: 11.3% to 30 September 2026, slightly ahead of IVV's 10.1%. That is encouraging, but a single year tells you very little. Of the 101 active share ETFs, most have no five-year record at all. Five years, ideally through a market fall, is a sensible minimum before you give a manager much weight.
Check 4: has it been consistent?
A great three years can hide a poor five. HYGG beat VGS by almost 13 points over three years, then lost 5.9% over the past year while VGS gained 10.1%. WCMQ followed a similar pattern: well ahead over three years, behind over one and five. Investors who bought after the strong run got the weak year. Look at 1, 3 and 5-year results together, and be wary of a fund that has only recently pulled ahead.
Check 5: trading costs and size
The fee is not the only cost. Active ETFs usually have wider buy-sell spreads, the gap between the price you pay and the price you could sell at. The big index funds trade on spreads of about 0.02%. Many active funds are 10 times wider or more.
Average buy-sell spread
Size and flows matter too. A small fund with steady outflows, such as PIXX at $58 million, carries some risk of being closed or merged, which could trigger a tax event at a time you did not choose.
Check 6: what are you actually paying for?
"Active" covers very different things. Some funds are high-conviction stock pickers backing a relatively small group of companies, such as HYGG or LPGD. Others are rules-based or "enhanced index" funds that stay close to the market for a low fee. JREG charges 0.30% and returned 61.0% over three years, close to VGS at 64.1%. Dimensional's DACE ($7.2 billion, 0.28%) and Macquarie's MQAE (0.03%) sit in the same middle ground, but both are too new for a three-year record.
- High-conviction funds can beat the market by a lot or lag it by a lot. They suit a small satellite position.
- Low-cost systematic funds will rarely be far from the index, for better or worse. The fee gap is small.
- "Complex ETF" in a name signals derivatives, gearing or other features, such as covered-call or geared funds. They are a different product again.
For most investors, and especially those drawing an income in retirement, a low-cost index core with any active fund kept to a small satellite is a common approach. See how to build a core portfolio and how to build a satellite portfolio.
Compare head to head: IVV vs IACT, VGS vs V1AC, VGS vs LPGD and VAS vs AASF, or browse every active ETF.
Compare VGS with HYGG and IACT →
Common questions
Are active ETFs worth the higher fee?
Rarely, on the evidence so far. Over five years to 30 September 2026, 2 of 15 active global share ETFs beat VGS and none of 9 active Australian share ETFs beat VAS. Some funds have done very well, but they are hard to pick in advance.
What is IACT?
The iShares US Factor Rotation Active ETF. It holds US shares and shifts between investment styles such as value, quality and momentum. It charges 0.45% a year, returned 11.3% over the year to 30 September 2026 against 10.1% for IVV, and took in $177 million in September 2026.
What is the best performing active ETF in Australia?
Over five years, LPGD (Loftus Peak Global Disruption) returned 120.8% to 30 September 2026, well ahead of VGS at 74.6%. It is a concentrated, disruption-focused fund charging 1.20% a year, so it can swing sharply.
What is the difference between an active ETF and an index ETF?
An index ETF buys every company in an index, so its returns closely match the market for a very low fee. An active ETF has a manager choosing shares to try to beat the market, usually for a higher fee, and its returns can be well above or below the index.
Joshua Stega is a financial adviser with 20 years' experience and the founder of ETF Adviser. He built ReviewETF to make every Australian ETF easy to find and compare.
General information only. It does not take into account your objectives, financial situation or needs. Consider the PDS and TMD before investing. Past performance is not a reliable indicator of future performance. Data as at 30 September 2026.