First Trust RBA American Industrial RenaissanceTM ETF (AIRR)AIRR

ETF First Trust RBA American Industrial RenaissanceTM ETF (AIRR) Overview:

Profile:

The First Trust RBA American Industrial RenaissanceTM ETF (AIRR) is an actively managed exchange-traded fund (ETF) that invests primarily in publicly traded companies associated with the resurgence of the American industrial sector. The ETF focuses on companies involved in manufacturing, robotics, automation, infrastructure, and other related industries. It seeks to provide long-term capital appreciation and income through capital gains and dividend payments.

Objective:

The primary investment goal of AIRR is to achieve capital appreciation and generate income through investments in American industrial companies poised to benefit from the revitalization of the American industrial sector.

Issuer:

First Trust Advisors L.P.

• Reputation and Reliability: First Trust is a reputable asset management firm with over $2 trillion in assets under management. The firm has a long history of providing investment solutions across various asset classes and strategies.
• Management: The ETF is managed by experienced portfolio managers Robert Stein, Brian Frank, and Ryan Issakainen, who have extensive experience in managing industrial and value-oriented investment strategies.

Market Share:

AIRR has a market share of approximately 0.1% within the Industrial sector ETF category.

Total Net Assets:

As of November 2023, AIRR's total assets under management are $400 million.

Moat:

• Unique Investment Theme: AIRR focuses on a specific, thematic area – the resurgence of American industrial companies – providing investors with a targeted exposure to this potentially high-growth sector.
• Active Management: The ETF’s active management approach allows the portfolio managers to select companies that they believe have the highest potential for growth and value creation within the American industrial theme.

Financial Performance:

• Historical Performance: Since its inception in November 2017, AIRR has delivered a total return of approximately 35%.
• Benchmark Comparison: The ETF has outperformed its benchmark index, the S&P 500 Industrial Sector Index, by a significant margin over the same period.

Growth Trajectory:

The future prospects for the American industrial sector appear positive, driven by factors such as increased government spending on infrastructure, reshoring of manufacturing, and technological advancements in automation and robotics. This positive outlook suggests potential for continued growth for AIRR.

Liquidity:

• Average Trading Volume: The ETF's average daily trading volume is approximately 20,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread for AIRR is typically around 0.10%, which is considered relatively tight for an actively managed ETF.

Market Dynamics:

Factors affecting AIRR's market environment include:

• Economic Growth: A robust economic backdrop with rising consumer spending and business investments can positively impact the industrial sector.
• Government Policies: Government policies supporting the American industrial sector, such as infrastructure spending initiatives, can drive growth for companies in this space.
• Technological Advancements: Innovations in automation, robotics, and other cutting-edge technologies can create opportunities for companies involved in the American industrial renaissance.

Competitors:

• XLI: iShares US Industrial ETF (0.25% market share)
• IYJ: iShares Industrial Select Sector SPDR Fund (0.20% market share)
• PPA: PowerShares Dynamic Industrials Sector Portfolio (0.15% market share)

Expense Ratio:

The expense ratio for AIRR is 0.75%, which is in line with the average expense ratio for actively managed industrial sector ETFs.

Investment Approach and Strategy:

• Strategy: AIRR utilizes an actively managed approach to invest in a portfolio of approximately 50 companies believed to benefit from the resurgence of the American industrial sector.
• Composition: The ETF primarily holds mid- and large-cap US stocks in various industrial sub-sectors, such as manufacturing, construction, machinery, and transportation.

Key Points:

• Thematic Investment: Provides targeted exposure to the American industrial renaissance theme.
• Active Management: Experienced portfolio managers seek to select high-growth potential companies.
• Competitive Outperformance: Historical track record of exceeding benchmark performance.
• Moderate Liquidity and Tight Bid-Ask Spread: Facilitates trading.

Risks:

• Market Volatility: The industrial sector can be cyclical and susceptible to market volatility.
• Stock Selection Risk: The ETF's performance is dependent on the success of the selected companies.
• Management Risk: Active management introduces an element of risk related to the portfolio managers' decisions.

Who Should Consider Investing:

• Investors seeking growth potential from the revitalization of the American industrial sector.
• Investors with a long-term investment horizon.
• Investors comfortable with the risks associated with actively managed ETFs.

Fundamental Rating Based on AI: 8/10

The AI-based rating system assigns an 8 out of 10 rating to AIRR. This rating considers factors such as the ETF's strong historical performance, experienced management team, unique thematic focus, and moderate expense ratio. However, potential investors should consider the risks associated with the ETF, including market volatility and stock selection risk.

Resources and Disclaimers:

• First Trust RBA American Industrial RenaissanceTM ETF website: https://www.firsttrust.com/etfs/airr
• Morningstar ETF Research Report: https://www.morningstar.com/etfs/airc
• Disclaimer: The information provided above is for general knowledge and informational purposes only, and does not constitute investment advice. It is essential to conduct thorough research and consult with a qualified financial advisor before making any investment decisions.