Should You Invest in the First Trust RBA American Industrial Renaissance ETF (AIRR)?

Designed to provide broad exposure to the Industrials - Broad segment of the equity market, the First Trust RBA American Industrial Renaissance ETF (AIRR) is a passively managed exchange traded fund launched on 03/10/2014.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $3.09 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. AIRR seeks to match the performance of the Richard Bernstein Advisors American Industrial Renaissance Index before fees and expenses.

The Richard Bernstein Advisors American Industrial Renaissance Index is measures the performance of small and mid cap US companies in the industrial and community banking sectors.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.70%, making it one of the most expensive products in the space.

It has a 12-month trailing dividend yield of 0.30%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector--about 88.70% of the portfolio, followed by Financials.

Looking at individual holdings, Rbc Bearings Incorporated (RBC) accounts for about 3.84% of total assets, followed by Mueller Industries, Inc. (MLI) and Huntington Ingalls Industries, Inc. (HII).

The top 10 holdings account for about 32.21% of total assets under management.

Performance and Risk

Year-to-date, the First Trust RBA American Industrial Renaissance ETF has lost about -11.36% so far, and is up roughly 1.61% over the last 12 months (as of 04/01/2025). AIRR has traded between $61.64 and $86.09 in this past 52-week period.

The ETF has a beta of 1.28 and standard deviation of 24.53% for the trailing three-year period, making it a high risk choice in the space. With about 53 holdings, it effectively diversifies company-specific risk.

Alternatives

First Trust RBA American Industrial Renaissance ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, AIRR is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.36 billion in assets, Industrial Select Sector SPDR ETF has $19.92 billion. VIS has an expense ratio of 0.09% and XLI charges 0.08%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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