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

Designed to provide broad exposure to the Industrials ETFs category of the market, the First Trust RBA American Industrial Renaissance ETF (AIRR) is a smart beta exchange traded fund launched on 03/10/2014.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.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.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 & IndexManaged by First Trust Advisors, AIRR has amassed assets over $10.38 billion, making it one of the largest 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 ExpensesInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.With one of the more expensive products in the space, this ETF has annual operating expenses of 0.69%.It's 12-month trailing dividend yield comes in at 0.14%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Industrials sector - about 93% of the portfolio.Taking into account individual holdings, Argan, Inc. (AGX) accounts for about 5.01% of the fund's total assets, followed by Mastec, Inc. (MTZ) and Comfort Systems Usa, Inc. (FIX).The top 10 holdings account for about 37.34% of total assets under management.Performance and RiskThe ETF return is roughly 30.01% so far this year and is up about 66.02% in the last one year (as of 05/18/2026). In the past 52-week period, it has traded between $75.42 and $131.94The ETF has a beta of 1.29 and standard deviation of 25.15% for the trailing three-year period, making it a high risk choice in the space. With about 53 holdings, it effectively diversifies company-specific risk .AlternativesFirst Trust RBA American Industrial Renaissance ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.Vanguard Industrials Index Fund ETF Shares (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the State Street Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials Index Fund ETF Shares has $7.62 billion in assets, State Street Industrial Select Sector SPDR ETF has $30.39 billion. VIS has an expense ratio of 0.09% and XLI changes 0.08%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFsBottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks