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Is First Trust RBA American Industrial Renaissance ETF (AIRR) a Strong ETF Right Now?
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Launched on 03/10/2014, the First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $220.60 million, making it one of the average sized ETFs in the Industrials ETFs. This particular fund 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.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.70%.
The fund has a 12-month trailing dividend yield of 0.12%.
Sector Exposure and Top Holdings
ETFs offer 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.
For AIRR, it has heaviest allocation in the Industrials sector --about 90% of the portfolio --while Financials and Energy round out the top three.
Taking into account individual holdings, Arcosa, Inc. (ACA - Free Report) accounts for about 3.67% of the fund's total assets, followed by Clean Harbors, Inc. (CLH - Free Report) and The Shyft Group, Inc. (SHYF - Free Report) .
The top 10 holdings account for about 32.81% of total assets under management.
Performance and Risk
The ETF has gained about 0% and is down about -2.09% so far this year and in the past one year (as of 01/03/2023), respectively. AIRR has traded between $36.26 and $47.26 during this last 52-week period.
The fund has a beta of 1.24 and standard deviation of 33.75% for the trailing three-year period, which makes AIRR a high risk choice in this particular space. With about 56 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust RBA American Industrial Renaissance ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.64 billion in assets, Industrial Select Sector SPDR ETF has $13.45 billion. VIS has an expense ratio of 0.10% and XLI charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
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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Is First Trust RBA American Industrial Renaissance ETF (AIRR) a Strong ETF Right Now?
Launched on 03/10/2014, the First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $220.60 million, making it one of the average sized ETFs in the Industrials ETFs. This particular fund 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.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.70%.
The fund has a 12-month trailing dividend yield of 0.12%.
Sector Exposure and Top Holdings
ETFs offer 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.
For AIRR, it has heaviest allocation in the Industrials sector --about 90% of the portfolio --while Financials and Energy round out the top three.
Taking into account individual holdings, Arcosa, Inc. (ACA - Free Report) accounts for about 3.67% of the fund's total assets, followed by Clean Harbors, Inc. (CLH - Free Report) and The Shyft Group, Inc. (SHYF - Free Report) .
The top 10 holdings account for about 32.81% of total assets under management.
Performance and Risk
The ETF has gained about 0% and is down about -2.09% so far this year and in the past one year (as of 01/03/2023), respectively. AIRR has traded between $36.26 and $47.26 during this last 52-week period.
The fund has a beta of 1.24 and standard deviation of 33.75% for the trailing three-year period, which makes AIRR a high risk choice in this particular space. With about 56 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust RBA American Industrial Renaissance ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.64 billion in assets, Industrial Select Sector SPDR ETF has $13.45 billion. VIS has an expense ratio of 0.10% and XLI charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
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.