Forget Index Funds: 3 Active ETFs That Have Crushed the S&P 500 Since 2020

"While most active ETFs fail to keep up with indices, that's not true about every actively managed fund. It turns out there are a few active ETFs that have outperformed the S&P 500 in recent years. Adding these picks to your portfolio can provide additional diversification and possibly boost your returns."

"The ARK Autonomous Technology & Robotics ETF gives investors exposure to the next wave of technological innovation. Self-driving cars are starting to show up in cities, and robotics continues to inch closer to mainstream products and services. The fund has a lofty 0.75% expense ratio, but its 56% return over the past year justifies the cost."

"The Avantis U.S. Large Cap Value ETF team looks for large-cap stocks with low valuations and high profitability ratios. It only has 0.15% expense ratio despite being an actively managed fund. That's a lower expense ratio than most passively managed funds."

While index funds dominate due to simplicity and low fees, certain actively managed ETFs have demonstrated superior performance compared to the S&P 500. The ARK Autonomous Technology & Robotics ETF focuses on emerging technologies like self-driving cars and robotics, achieving 56% returns over the past year despite a 0.75% expense ratio. Its concentrated portfolio of 37 growth stocks is managed by Cathie Wood. The Avantis U.S. Large Cap Value ETF takes a different approach, identifying undervalued large-cap stocks with strong profitability at just 0.15% expense ratio. With over 200 holdings emphasizing value stocks, it demonstrates that active management can succeed through disciplined stock selection and lower costs.

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