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Understanding the First Trust RBA American Industrial Renaissance™ ETF (AIRR)
The First Trust RBA American Industrial Renaissance™ ETF (AIRR) is an exchange-traded fund designed to provide investors with exposure to U.S.-based companies that are driving the revitalization of the American industrial sector. This ETF focuses primarily on small- and mid-cap companies operating in industries such as manufacturing, engineering, construction, and industrial services, which are integral to the ongoing transformation and modernization of the U.S. economy. By investing in AIRR, investors can gain diversified access to a portfolio of companies that are positioned to benefit from trends like onshoring, infrastructure development, and advancements in industrial technologies.
Core Investment Focus
AIRR’s thematic approach targets companies that are at the forefront of the 'American Industrial Renaissance.' This includes businesses that are innovating in areas such as advanced manufacturing, automation, and supply chain efficiency. The fund’s strategy aligns with broader economic trends, including increased government spending on infrastructure, the reshoring of manufacturing operations to the United States, and the adoption of environmentally sustainable industrial practices. By concentrating on small- and mid-cap companies, AIRR offers investors the potential for growth in emerging leaders within the industrial sector.
Revenue Model and Operational Insights
As an ETF, AIRR generates revenue through management fees charged to its investors. These fees support the fund’s operations, including portfolio management, research, and administrative costs. The ETF’s performance is closely tied to the success of its underlying holdings, which are selected based on specific criteria that align with its industrial renaissance theme. Investors benefit from the fund’s diversification, which reduces the risk associated with investing in individual companies while providing targeted exposure to a high-growth sector.
Market Position and Competitive Landscape
Within the competitive landscape, AIRR differentiates itself through its focus on the American industrial sector and its emphasis on smaller, growth-oriented companies. This positions it as a unique option for investors seeking thematic exposure to U.S. industrial innovation. Key competitors include other industrial-focused ETFs and mutual funds, many of which may target broader or global industrial markets. AIRR’s niche focus allows it to stand out by aligning its portfolio with specific trends driving the resurgence of American industry.
Industry Trends and Challenges
The industrial sector is undergoing significant transformation, driven by factors such as technological innovation, increased demand for sustainable practices, and shifts in global supply chains. AIRR is well-positioned to capitalize on these trends, particularly as U.S. companies invest in modernizing infrastructure and adopting advanced manufacturing techniques. However, the ETF also faces challenges, including macroeconomic factors like interest rate fluctuations, geopolitical tensions, and sector-specific risks such as raw material shortages and labor constraints.
Why Consider AIRR?
For investors seeking exposure to the growth potential of the U.S. industrial sector, AIRR offers a compelling option. Its thematic approach, combined with a focus on small- and mid-cap companies, provides a unique opportunity to participate in the American industrial renaissance. By investing in a diversified portfolio of companies driving innovation and modernization, AIRR aligns with long-term economic trends while mitigating the risks associated with individual stock investments.
First Trust announced that its First Trust RBA American Industrial Renaissance® ETF (NASDAQ: AIRR) has surpassed $3 billion in net assets as of January 6, 2025. The ETF, which tracks small and mid-cap U.S. companies in industrial and community banking sectors, has demonstrated strong performance with a 33.43% one-year return as of December 31, 2024, outperforming the S&P 500® Industrials Index's 17.47%.
Since its March 2014 inception, AIRR has achieved an average annual return of 13.56%, surpassing its benchmark index. The fund has earned a 5-Star Overall Morningstar Rating™ and ranks #1 in Morningstar's Industrials category across multiple timeframes. The fund's success aligns with Richard Bernstein Advisors' thesis that U.S. industrial sector may continue gaining global market share due to deglobalization trends.
First Trust RBA American Industrial Renaissance® ETF (NASDAQ: AIRR) has achieved significant milestones, surpassing $3 billion in net assets as of January 6, 2025. The fund focuses on small and mid-cap U.S. companies in industrial and community banking sectors, particularly in traditional manufacturing hubs.
Key performance highlights as of December 31, 2024 include:
- 1-year return of 33.43% (NAV), outperforming the S&P 500® Industrials Index (17.47%)
- Since March 2014 inception, 13.56% average annual return (NAV)
- Largest ETF in Morningstar's Industrials category
- #1 performing fund in its category across multiple timeframes
- 5-Star Overall Morningstar Rating™
Richard Bernstein Advisors believes the U.S. industrial sector may continue gaining global market share due to deglobalization, making this an enduring investment theme. The fund has outperformed the S&P 500® Index in multiple time periods despite not holding information technology or large cap growth companies.
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