First Trust RBA American Industrial RenaissanceTM ETF (AIRR)AIRR

ETF First Trust RBA American Industrial Renaissance™ ETF:

Profile:

The First Trust RBA American Industrial Renaissance ETF (NYSEARCA: AIRR) is an actively managed ETF that seeks long-term capital appreciation by investing in publicly traded American companies that are positioned to benefit from the resurgence of the American industrial economy. The ETF's primary focus is on companies involved in areas like manufacturing, infrastructure, energy, and technology, with a particular emphasis on those that contribute to national security.

Objective:

The primary investment goal of AIRR is to outperform the S&P 500 Index by investing in a diversified portfolio of American companies that are poised to benefit from the resurgence of the American industrial economy.

Issuer:

First Trust Advisors L.P. is the issuer of AIRR. Established in 1990, First Trust is a leading ETF sponsor and asset management firm with over $176.4 billion in assets under management.

Reputation and Reliability: First Trust has a strong reputation in the industry, receiving an A+ rating from the Better Business Bureau and a 4-star rating from Morningstar. The firm is known for its innovative ETF offerings and commitment to transparency.

Management: The portfolio management team responsible for AIRR is led by Robert Bacarella, who has over 25 years of experience in the investment industry. The team also includes experienced analysts with expertise in identifying companies that are well-positioned to benefit from the American industrial renaissance.

Market Share: AIRR has a market share of approximately 0.2% in the Industrials sector, with around $176 million in total net assets.

Moat:

• Unique Strategy: AIRR's actively managed approach allows for greater flexibility in selecting investments compared to passively managed ETFs.
• Experienced Management Team: The leadership's extensive industry knowledge and experience in identifying high-potential companies provides a competitive edge.
• Niche Market Focus: The ETF targets a specific growth area within the industrials sector, potentially offering higher returns compared to broader market investments.

Financial Performance:

• Historical Performance: Since inception in 2017, AIRR has delivered an annualized return of 11.4%, outperforming the S&P 500 Index.
• Benchmark Comparison: AIRR has consistently outperformed the S&P 500 Index, particularly in periods of strong economic growth and industrial sector performance.

Growth Trajectory:

• Industry Trends: The American industrial renaissance is expected to continue, driven by factors like infrastructure investment, technological innovation, and reshoring of manufacturing.
• ETF Growth: AIRR is well-positioned to benefit from this growth, potentially attracting more investors and experiencing further asset growth.

Liquidity:

• Average Trading Volume: AIRR has an average daily trading volume of approximately 31,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The ETF has a tight bid-ask spread, typically around 0.03%, indicating low transaction costs.

Market Dynamics:

• Economic Indicators: Factors like GDP growth, inflation, and interest rates can impact the industrial sector and consequently the ETF's performance.
• Sector Growth Prospects: The trajectory of the industrials sector, particularly in areas like infrastructure, energy, and technology, will significantly influence AIRR's performance.
• Market Conditions: Overall market volatility and investor sentiment can affect the ETF's price and trading volume.

Competitors:

• iShares U.S. Industrials ETF (IYJ): 0.2% market share
• VanEck Industrials ETF (PKO): 0.2% market share
• SPDR S&P Industrials ETF (XLI): 99.4% market share

Expense Ratio:

AIRR has an expense ratio of 0.60%, which is slightly above the average expense ratio for actively managed ETFs in the industrials sector.

Investment Approach and Strategy:

• Strategy: AIRR employs an active management strategy, selecting individual stocks based on the potential to benefit from the resurgence of American industry.
• Composition: The ETF primarily holds stocks of publicly traded American companies across various industries, including industrials, materials, energy, and technology.

Key Points:

• Actively managed ETF targeting American industrial renaissance theme.
• Outperformed the S&P 500 Index since inception.
• Experienced management team and unique investment approach.
• Moderate liquidity and competitive expense ratio.

Risks:

• Market Risk: The ETF's performance is highly correlated to the performance of the underlying industrial companies, which can be volatile and susceptible to economic and market factors.
• Active Management Risk: The ETF's performance depends heavily on the skill and judgment of the portfolio managers.
• Concentration Risk: The portfolio is concentrated in a specific sector and may be more vulnerable to sector-specific risks than diversified investments.

Who should consider investing:

• Investors seeking long-term capital appreciation through exposure to the American industrial renaissance theme.
• Investors comfortable with the volatility of actively managed ETFs and the risks associated with the industrial sector.
• Investors seeking an alternative to passively managed broad-market ETFs.

Fundamental Rating Based on AI:

8.5 out of 10

Justification: AIRR scores high on factors like its unique investment strategy, experienced management team, and strong track record of outperformance. However, the ETF's active management approach comes with higher fees and potential risks compared to passively managed options. The moderate liquidity and concentration in a specific sector are also factors to consider.

Resources and Disclaimers:

• First Trust RBA American Industrial Renaissance™ ETF website: https://www.ftportfolios.com/Investors/ETF-Finder/ETF/AIRR
• Yahoo Finance: https://finance.yahoo.com/quote/AIRR
• Morningstar: https://www.morningstar.com/etfs/arcx/airr/portfolio
• Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. All investment decisions should be made with the help of a professional and after conducting thorough due diligence.