Active ETFs boom with three Morningstar top picks

TL;DR

Barron's highlights the boom in active ETFs as investors seek options beyond passive index funds.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)
Morningstar names three top picks for 2026: T. Rowe Price Floating Rate ETF (TFLR), Hartford Strategic Income ETF (HFSI), and Capital Group Dividend Value ETF (CGDV).[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)[[2]](https://www.morningstar.com/etfs/arcx/tflr/quote)[[3]](https://www.morningstar.com/etfs/bats/hfsi/quote)[[4]](https://www.morningstar.com/etfs/arcx/cgdv/quote)
These funds offer income and diversification through bank loans, bonds, and dividend stocks in a choppy market.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)

The story at a glance

Barron's reports on the rapid growth of active ETFs, which now hold about 10% of total ETF assets at $13.3 trillion as of March.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63) Citigroup strategist Drew Pettit forecasts active ETFs' market share doubling to 21% as assets hit $42 trillion by 2035.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63) The article spotlights three Morningstar-recommended active ETFs from T. Rowe Price, Hartford Funds, and Capital Group as strong picks for income and diversification in 2026.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63) This comes amid market volatility from oil prices and steady Fed rates.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)

Key points

Active ETFs' assets have surged, making up 10% of the $13.3 trillion ETF market; Citigroup sees this share doubling over the next decade.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)
T. Rowe Price Floating Rate ETF (TFLR) targets leveraged bank loans just below investment grade, yields nearly 7%, up slightly this year, and averaged 8% annualized over one and three years, beating its category.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)
Hartford Strategic Income ETF (HFSI) helps in a bond market where long-term yields sit around 4.3% year to date, amid lingering inflation fears from oil despite U.S.-Iran cease-fire and expected steady Fed rates.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)
Capital Group Dividend Value ETF (CGDV) provides income via dividends, appealing as investors navigate choppy conditions.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)
Morningstar rates all three highly as top active ETF picks for 2026, fitting needs for floating-rate income, strategic bonds, and dividend value.[[5]](https://oakmark.com/wp-content/uploads/sites/3/2026/03/Morningstar-The-Best-Active-ETFs-to-Buy-in-2026.pdf)[[6]](https://www.morningstar.com/funds/best-active-etfs-buy-2026)

Details and context

Investors have flocked to active ETFs for better navigation of volatility, moving past reliance on passive funds tracking big tech or indexes. Total ETF assets stood at $13.3 trillion in March per LPL Financial data, with active strategies gaining traction.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)

TFLR focuses on higher-yielding loans resilient to rate changes, posting gains in a tough year. HFSI offers flexibility across bonds when yields rise on oil worries post-cease-fire. CGDV taps dividend payers for steady income without heavy tech exposure.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)

These picks align with Morningstar's broader list of top active ETFs, emphasizing strong processes and people in specialized roles like bank loans and multisector bonds.[[5]](https://oakmark.com/wp-content/uploads/sites/3/2026/03/Morningstar-The-Best-Active-ETFs-to-Buy-in-2026.pdf)

Key quotes

"Drew Pettit, U.S. equity and ETF strategist at Citigroup: 'Underlying the impressive industry growth story is the surge in active ETFs. We expect this tailwind to persist.'"[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)

Why it matters

Active ETFs now represent a growing slice of the market, offering tools to handle rate uncertainty, inflation risks, and sector rotations beyond passive benchmarks.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)

Investors get specific income options like 7% yields from loans or dividends, plus diversification in rocky conditions, potentially boosting returns over indexes.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)

Watch Fed rate decisions and oil prices, as they could sway bond yields and these funds' performance; active strategies may shine if volatility persists.[[1]](https://www.barrons.com/articles/active-etfs-are-booming-these-3-are-top-picks-9d416e63)