Over a three-year period up to the end of February, 19 out of 52 active ETFs outperformed the respective benchmark index after costs.

In the global equity sector, 91% of active funds listed in euros underperformed their benchmark index, and the proportion is even higher in the long term. Corporate bond funds delivered better results, at least in the short term.

According to the Fondsconsult analysis, the "Invesco Quantitative Strategies ESG Global Equity Multi-Factor" $IQSA (+1,54%) outperformed the market the most. Over the past three years, the ETF delivered an average annual return of 15.4 percent - 3.5 percentage points more than the benchmark index MSCI ACWI. Compared to the somewhat narrower MSCI World, the outperformance amounted to 2.3 percentage points.

The actively managed equity fund is based on the composition of the MSCI World and filters according to ESG criteria, i.e. environmental, social and corporate governance standards. The remaining shares are weighted using a multi-factor approach. This is based on how favorably the shares are valued compared to the market, how their balance sheet is viewed and how profits are developing.

The Invesco ETF manages one billion US dollars and costs 0.3 percent annually.

Observers expect the upswing in active ETFs to continue in the coming years. At the end of December, 54 billion euros were already managed in more than 120 active ETFs in Europe. In the USA, the market is growing even faster: ETF experts from the US financial services provider State Street estimate that active exchange-traded funds will account for ten percent of all inflows into the market this year.

Many active ETFs are still young, and in case of doubt the returns will only become apparent after years.

Source (excerpt) / graphic: Handelsblatt

I have decided to switch my MSI World shares into the $IQSA (+1,54%) (Invesco Quantitative Strategies ESG Global Equity Multi-Factor UCITS ETF - USD ACC ETF, ISIN: IE00BJQRDN15).

Reasons:

• I am convinced by the ETF's active management approach in view of the "stormy times" I expect in 2025 with lower costs compared to active funds
• continued investment in the world equity basket with a different weighting of equities in the investment horizon in the three areas of value, quality and momentum compared to the MSCI World
• I would like to reduce my risk with regard to the seven large tech stocks (which are currently too heavily weighted in the MSCI World but also in the FTSE ACW), as the share basket differs significantly
• Good historical performance comparable to the MSCI World
• Investments according to certain ESG criteria (sustainability is not my main goal, but I would like to invest part of my portfolio in this direction)
• Disadvantage: additional costs (0.5 instead of 0.15), which in my view are not an obstacle to investing, considering the historical performance.

Have you perhaps already looked at this active ETF? How did you rate it?