Today marks the Qixi Festival, the annual reunion of the Cowherd and the Weaver Girl. Beyond the romance, it reminds us that meaningful relationships require patient searching and long-term commitment. Investing is no different.

In 2026, China's capital markets will welcome a new arrival—the active ETF. Some describe it as "an actively managed fund wearing an ETF coat," while others see it as a clever fusion of active stock-picking capability with on-exchange trading mechanics. This Qixi Festival, let's think of selecting an active ETF as finding a "long-term partner" on your investment journey. How do you determine if it's worth your trust? Let's explore today.

What Exactly Is an Active ETF?

Let's first get to know this newcomer. Traditional ETFs are "passive"—they track a specific index, rising when it rises and falling when it falls, capturing market average returns. The key difference with active ETFs is that they no longer track any index. Instead, they are "open-end funds listed on exchanges where fund managers independently choose investment strategies, without aiming to track a specific index as their investment objective."

Put simply: active ETFs package the stock-picking ability of off-exchange active funds into an ETF framework. Fund managers select stocks and adjust positions independently, targeting returns that exceed the performance benchmark rather than simply replicating an index. Meanwhile, they retain two core advantages of ETFs: position transparency—detailed subscription and redemption lists are published daily, so you can see exactly what's held; and trading flexibility—real-time buying and selling on the exchange, with funds available the same day after selling.

Globally, active ETFs have become a major growth area for the asset management industry. In the US, for example, as of July 15, 2026, there were 3,287 active ETFs with assets of approximately $2.03 trillion, representing 12.8% of total US ETF assets. In June of this year, the China Securities Regulatory Commission officially announced support for launching active ETFs; in July, the first batch of 18 active ETFs was formally filed. It's fair to say the "Year One of Active ETFs" has arrived.

How to Select an Active ETF?

Selecting an active ETF bears a subtle resemblance to choosing a partner—the core lies in "judging the person." Passive ETFs are like the subway, moving steadily along a fixed track. Active ETFs are different; they're built flexibly by fund managers based on their own research and judgment. Returns depend heavily on the manager's skill and decision-making. Therefore, selecting an active ETF is essentially about choosing a trustworthy "pilot." Just as you'd evaluate a partner's character, capability, and alignment of values, selecting an active ETF warrants careful examination from several dimensions.

Dimension One: Evaluating the "Person"—The Fund Manager

Active ETF performance relies heavily on the fund manager's ability. Investors can assess from multiple angles: Is the investment philosophy clear—does the strategy logic hold up? Is the investment framework replicable? If a fund manager can't even articulate their own investment philosophy, how can you feel confident entrusting your money? Is historical performance stable—has it experienced a full market cycle? Does it consistently deliver excess returns relative to the benchmark? Don't just look at short-term rankings; focus on long-term performance and the ability to navigate various market conditions. How is risk control—are drawdowns and volatility within acceptable ranges? Is the style consistent—does the investment approach remain steady over time? Switching from value today to growth tomorrow, this "style drift" is a major taboo in investing.

Dimension Two: Assessing the "Family Background"—The Fund Management Company

According to the business guidelines of the Shanghai and Shenzhen stock exchanges, institutions eligible to file for active ETF launches have already passed a rigorous qualification screening: managers must have at least 5 years of experience in active equity public fund management, with average active equity management scale of no less than 10 billion yuan over the past 3 years. On this basis, investors can further examine: Does the fund manager have extensive ETF management experience? Is the product line comprehensive? Do they have experience managing enhanced ETFs? Rich ETF operational experience helps provide solid support for the smooth operation of active ETFs going forward.

Dimension Three: Understanding the "Personality"—Strategy Types

From the names of the first 18 active ETFs, "balanced," "value," and "dividend" are the most frequently appearing keywords. Different strategies suit different investor "tastes": Value style—focuses on undervalued, high-dividend stocks with relatively lower return elasticity, suitable for investors seeking stability; Balanced style—covers both value and growth with moderate return elasticity, suitable for investors with neutral risk appetite; Growth style—focuses on high-prosperity sectors and high-growth stocks with relatively greater return elasticity, suitable for investors with higher risk tolerance. What kind of "personality" you choose depends on who you are. An aggressive growth investor buying a value product is like two mismatched personalities forced together—it rarely lasts.

Dimension Four: Gauging "Sincerity"—Transparency and Constraints

Regulators have set a series of "hard constraints" on active ETFs: Position diversification—hold at least 30 stocks, with the top ten holdings not exceeding 60% of fund net assets; Daily disclosure—publish subscription and redemption lists before market open each trading day, making full positions "visible daily"; Liquidity threshold—stocks held in the portfolio must rank in the top 80% of all listed stocks by average daily trading value over the past year on their respective exchanges; Turnover control—strictly prohibit short-term frequent trading and concentrated large-scale position adjustments. These constraints draw a clear safety boundary for active management. The daily disclosed holdings will serve as the "touchstone" for testing the manager's sincerity.

Final Thoughts: The Romance of Qixi Lies in "Long-Term" Commitment

The beauty of Qixi lies in the annual reunion, but also in the unwavering arrival that spans millennia. Relationships that truly withstand the test of time are the most precious. Investing should be the same. If you seek market average returns and prefer low-cost index tracking, passive ETFs remain a worthy choice. Active ETFs, on the other hand, suit investors who want to pursue Alpha returns beyond Beta. The birth of active ETFs marks China's ETF market transitioning from the "passive tools era" to a new stage of "coordinated development of active and passive." It fills the gap for fully active management products on the exchange, providing investors with a new tool to capture active management excess returns on-exchange. But even the best tool requires a discerning eye. Select an active ETF like you'd choose a partner—evaluate the "person" (fund manager), the "family background" (fund management company), the "personality" (strategy type), and the "sincerity" (transparency and constraints)—to find the "investment partner" truly worth a long-term relationship.

Finally, we must also maintain a sense of clarity: "active" does not mean "guaranteed profits." Excess returns are not a certainty. Active management centers on the fund manager's judgment, carrying both the potential to outperform and the risk of underperforming. Good investing, like good relationships, deserves patient searching and long-term protection. Choosing what suits you best is the true path to long-term success. Active E-points: opening new horizons in investing!

Risk Disclosure: The views expressed are for reference only and will change with market conditions. They do not constitute any investment advice or commitment. The products mentioned are equity funds, which are securities investment fund types with higher expected risk and expected returns. Their expected returns and risk levels are higher than hybrid funds, bond funds, and money market funds. If you wish to purchase related fund products, please carefully read the fund's "Contract," "Prospectus," and other fund legal documents, and choose products matching your risk level. Funds carry risk; invest with caution. MACD golden cross signals are forming, and these stocks are performing well!