Is First Trust RBA American Industrial Renaissance ETF (AIRR) a Strong ETF Right Now?

  • July 3, 2025
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Making its debut on 03/10/2014, smart beta exchange traded fund First Trust RBA American Industrial Renaissance ETF (AIRR) provides investors broad exposure to the Industrials ETFs category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is sponsored by First Trust Advisors. It has amassed assets over $4.01 billion, making it one of the largest ETFs in the Industrials ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Richard Bernstein Advisors American Industrial Renaissance Index.

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.

Operating expenses on an annual basis are 0.70% for this ETF, which makes it one of the most expensive products in the space.

It has a 12-month trailing dividend yield of 0.29%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

AIRR's heaviest allocation is in the Industrials sector, which is about 90.3% of the portfolio.

When you look at individual holdings, Dycom Industries, Inc. (DY) accounts for about 3.42% of the fund's total assets, followed by Bwx Technologies, Inc. (BWXT) and Emcor Group, Inc. (EME).

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