AIRR ETF: Assessing the -7% Monthly and -19% Quarterly Retracement in Industrial Themes

Key Takeaways

• AIRR is a passively managed exchange-traded fund (ETF) that tracks the Richard Bernstein Advisors American Industrial Renaissance Index, targeting small- and mid-cap U.S. industrial and community-banking companies.
• The portfolio is roughly 92% industrials and 8% financials, with top holdings spanning power infrastructure, defense, engineering, construction, and logistics.
• The fund has pulled back approximately 7% over the trailing month and roughly 19% over the trailing quarter, retracing part of a strong prior-year rally.
• Core investment themes include manufacturing reshoring, infrastructure and electric-grid spending, and defense modernization.
• The fund carries a 0.69% net expense ratio, approximately 54 holdings, and more than $8 billion in assets under management (AUM).

Understanding the AIRR ETF Structure

The First Trust RBA American Industrial Renaissance ETF (AIRR) seeks investment results that correspond generally to the price and yield, before fees and expenses, of the Richard Bernstein Advisors American Industrial Renaissance Index. The underlying index measures the performance of small- and mid-capitalization U.S. companies in the industrial and community banking sectors that may benefit from a regain in U.S. industrial market share, a theme tied to domestic manufacturing revival and reshoring.

Launched in March 2014 and issued by First Trust, AIRR is passively managed and non-leveraged, normally investing at least 90% of its net assets in index securities. The portfolio holds roughly 52 to 58 securities depending on the review period, with a net expense ratio of approximately 0.69%. I also checked this using Tickeron’s AI Screener to see how the fund compares to other industrial-focused vehicles.

Sector exposure remains heavily concentrated in industrials at about 92% of the fund, with financials—primarily community banks—representing roughly 8%. Holdings are relatively diversified, with individual positions generally in the low-single-digit percentage range. Among the largest recent holdings are IES Holdings, Kratos Defense & Security Solutions, Owens Corning, SPX Technologies, BWX Technologies, Nextpower, Saia, and Powell Industries.

Industry and Thematic Landscape

AIRR sits at the intersection of several long-running structural themes. The push to reshore and onshore manufacturing capacity in the United States has supported domestic engineering, construction, and industrial-services companies that make up a large share of the portfolio. Heavy infrastructure investment—including roads, bridges, utilities, and water systems—benefits names such as Sterling Infrastructure, Granite Construction, and MasTec.

Rising electricity demand, driven by data centers and broader electrification, has strengthened the outlook for power-infrastructure and grid-related companies, including Nextpower, Powell Industries, IES Holdings, and Argan. At the same time, sustained defense and national-security spending supports contractors such as Kratos Defense & Security Solutions, BWX Technologies, and Huntington Ingalls Industries.

The community-banking sleeve adds a distinct macro sensitivity. Regional and community lenders tend to benefit when economic activity and loan demand are firm, but their margins and valuations are also influenced by the interest-rate environment and by broader financial-sector sentiment.

Performance and Positioning Snapshot

AIRR has recently traded near $105 per share, down roughly 7% over the trailing month and approximately 19% over the trailing quarter. This represents a meaningful pullback from mid-2026 highs following a substantial prior-year advance, during which the fund's 52-week trading range expanded significantly. The decline reflects a retracement of a strong, trend-driven rally rather than a change in the fund's underlying structure.

Because the portfolio is broadly equal-weighted in character—with top holdings typically representing only about 3% of assets each—no single stock has dominated recent performance. Instead, the move has been driven by sector-wide factors affecting small- and mid-cap industrials, including profit-taking after extended gains, elevated valuations in select infrastructure and power names, and shifting expectations around interest rates. The fund's relatively high beta, a measure of volatility versus the broader market, means it tends to amplify both up and down moves in equity markets.

2026 Outlook and Key Factors to Monitor

Several structural factors are likely to shape AIRR's performance over the coming year. The path of interest rates remains central: higher-for-longer borrowing costs can pressure valuations of rate-sensitive small- and mid-cap industrials and weigh on the community-banking sleeve, while a declining-rate environment could provide relief.

Trade and tariff policy will remain important for the reshoring thesis, as shifts in supply-chain strategy can accelerate or slow domestic manufacturing investment. Continued infrastructure and electric-grid spending, including demand tied to data-center buildout and electrification, is a key earnings driver for many top holdings. Defense-budget priorities and national-security spending will influence contractors such as Kratos, BWX Technologies, and Huntington Ingalls.

Investors should also watch valuation levels and capital flows into industrial ETFs after an extended period of gains. A prolonged rotation away from cyclical and infrastructure names, or a slowdown in capital-expenditure cycles among major holdings, would represent notable risks. Conversely, firm industrial demand, disciplined cost management across portfolio companies, and easing financial conditions could support the fund's longer-term investment themes.

Using Tickeron’s AI Screener in My Research Process

I often turn to Tickeron’s AI Screener when evaluating funds like AIRR. The platform lets me scan for small- and mid-cap industrial names using technical indicators, fundamentals, and AI-generated signals to compare performance characteristics and emerging patterns. It has become a useful part of my routine for spotting how individual holdings align with broader themes without replacing my own analysis.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

Disclaimers and Limitations

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.

Notable companies

Industry description

Market Cap

High and low price notable news

Volume