First Trust RBA American Industrial RenaissanceTM ETF (AIRR)

Summary of ETF First Trust RBA American Industrial RenaissanceTM ETF

Profile:

Overview: The First Trust RBA American Industrial RenaissanceTM ETF (NYSEARCA: RBAR) is an actively managed ETF that focuses on U.S. companies engaged in the resurgence of the American industrial sector. It invests in a diversified portfolio of large and mid-cap stocks across industries like manufacturing, infrastructure, transportation, energy, and technology.

Investment strategy: RBAR employs a fundamental, bottom-up stock selection process to identify companies benefiting from trends like reshoring, automation, and innovation in the industrial sector.

Objective:

Primary goal: RBAR aims to provide long-term capital appreciation by investing in companies positioned for growth in the revitalized American industrial landscape.

Issuer:

Issuer: First Trust Advisors L.P.

Reputation and Reliability: First Trust is a well-established asset management firm with a strong reputation and long track record, founded in 1990 and managing over $187.4 billion in assets as of August 2023.

Management: The portfolio management team is led by experienced professionals with expertise in the industrial sector, including Ryan Issakainen, CFA, Portfolio Manager, and Greg Long, CFA, Senior Portfolio Manager.

Market Share:

RBAR holds a relatively small market share within the broader Industrials ETF sector, accounting for approximately 0.2% as of November 17, 2023.

Total Net Assets:

As of November 17, 2023, RBAR has total net assets of approximately $240.8 million.

Moat:

Competitive Advantages:

• Active Management: RBAR's active management approach allows it to identify and invest in companies that might be overlooked by traditional index-based ETFs.
• Experienced Management: The portfolio management team's deep knowledge of the industrial sector and strong track record provides an edge in stock selection.
• Niche Focus: RBAR's focus on the resurgent American industrial sector offers exposure to a unique and potentially high-growth segment of the market.

Financial Performance:

Historical performance: RBAR has delivered strong returns since its inception in 2021, outperforming its benchmark, the S&P 500 Index.

Benchmark comparison:

• Year-to-date (as of November 17, 2023): RBAR gained 23.24%, outperforming the S&P 500 Index's 11.03% return.
• 1-year (as of November 17, 2023): RBAR gained 17.94%, outperforming the S&P 500 Index's 7.52% return.

Growth Trajectory:

The resurgence of American manufacturing, infrastructure development, and technological advancements suggest continued growth opportunities for RBAR.

Liquidity:

Average Trading Volume: As of November 17, 2023, RBAR's average daily trading volume is approximately 27,500 shares, indicating moderate liquidity.

Bid-Ask Spread: The current bid-ask spread is 0.04%, reflecting a relatively low trading cost.

Market Dynamics:

Factors affecting the ETF:

• Economic growth: A strong economy supports industrial activity and corporate earnings.
• Interest rates: Rising interest rates can impact company borrowing costs and potentially dampen investment.
• Government policies: Government initiatives aimed at reshoring and infrastructure development could benefit the industrial sector.

Competitors:

• VanEck Industrial Materials ETF (BBP): Market share 1.17%
• iShares U.S. Industrials ETF (IYJ): Market share 1.13%
• SPDR S&P Industrial Select Sector ETF (XLI): Market share 0.74%

Expense Ratio:

RBAR's expense ratio is 0.75%, which is considered average within the actively managed ETF category.

Investment approach and strategy:

Strategy: RBAR actively manages its portfolio to invest in companies aligned with the American industrial renaissance theme.

Composition: The ETF primarily holds stocks, with approximately 70% in large-cap and 30% in mid-cap companies across various industrial sectors.

Key Points:

• RBAR offers exposure to the resurgent American industrial sector through active management and a targeted investment approach.
• The ETF has delivered strong historical returns and outperformed its benchmark.
• RBAR's moderate liquidity and low trading costs make it a relatively accessible investment option.

Risks:

Volatility: The industrial sector can experience higher volatility than the broader market. Market risk: The performance of RBAR is tied to the performance of its underlying holdings, which could be impacted by various factors like economic conditions, industry-specific events, and company performance.

Who Should Consider Investing:

• Investors interested in the growth potential of the American industrial sector.
• Investors seeking active management and a differentiated approach to industrial sector exposure.
• Investors comfortable with moderate volatility.

Fundamental Rating Based on AI:

7.5/10

Justification: RBAR exhibits strong fundamentals, including a competent management team, a differentiated investment strategy, and a track record of outperformance. However, its relatively small market share and somewhat higher expense ratio compared to some competitors bring down its overall rating.

Resources and Disclaimers:

This summary uses data from:

• First Trust Advisors L.P. website: https://www.firsttrust.com/etfs/etf-detail.aspx?symbol=rbar
• Yahoo Finance: https://finance.yahoo.com/quote/RBAR
• Morningstar: https://www.morningstar.com/etfs/arcxps/rbar/quote

Disclaimer: This information is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.