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First Trust RBA American Industrial Renaissance® ETF (AIRR)
Investment Objective/Strategy - The Fund seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an index called the Richard Bernstein Advisors American Industrial Renaissance® Index (the "Index"). The Fund will normally invest at least 90% of its net assets (plus the amount of any borrowings for investment purposes) in U.S. equity securities that comprise the Index. The Index is designed to measure the performance of small and mid cap U.S. companies in the industrial and community banking sectors.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The Richard Bernstein Advisors American Industrial Renaissance® Index is designed to measure the performance of small and mid cap U.S. companies in the industrial and community banking sectors.
  • To construct the index, Richard Bernstein Advisors LLC (RBA) begins with the Russell 2500 Index and eliminates companies not directly related to manufacturing and related infrastructure, and banking.
  • Banks will then be chosen from states considered to be traditional manufacturing hubs.
  • Bank stocks will be limited to approximately 10% of the index at rebalance.
  • RBA screens to exclude companies with non-U.S. sales greater than or equal to 25% and for positive 12-month forward earnings estimates.
  • RBA uses a proprietary portfolio optimization method to weight each individual constituent company. No position will exceed approximately 4% of the total index at rebalance. Other criteria:
    • $6 minimum share price
    • $200 million minimum market cap
    • Liquidity of at least $500k trading volume on average each day
  • At each quarter the index is rebalanced such that each segment of the index will be capped at its predetermined weight. If at any time during the year other than the rebalancing date, a security no longer meets the eligibility criteria, or is otherwise determined to have become ineligible for inclusion in the index, the security is removed from the index and is not replaced.
Fund Overview
TickerAIRR
Fund TypeIndustrials
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
CUSIP33738R704
ISINUS33738R7044
Intraday NAVAIRRIV
Fiscal Year-End09/30
ExchangeNasdaq
Inception3/10/2014
Inception Price$19.98
Inception NAV$19.98
Rebalance FrequencyQuarterly
Expense Ratio0.70%
Current Fund Data (as of 9/18/2020)
Closing NAV1$26.13
Closing Market Price2$26.14
Bid/Ask Midpoint$26.14
Bid/Ask Premium0.02%
Total Net Assets$47,042,360
Outstanding Shares1,800,002
Daily Volume4,461
Average 30-Day Daily Volume20,868
Closing Market Price 52-Week High/Low$29.54 / $17.02
Closing NAV 52-Week High/Low$29.53 / $16.99
Number of Holdings (excluding cash)57
Fund Characteristics (as of 8/31/2020)7
Maximum Market Cap.$11,929
Median Market Cap.$1,156
Minimum Market Cap.$250
Price/Earnings17.15
Price/Book1.78
Price/Cash Flow10.62
Price/Sales0.76
Top Holdings (as of 9/18/2020)*
Holding Percent
Generac Holdings Inc. 3.75%
Quanta Services, Inc. 3.64%
Comfort Systems USA, Inc. 3.49%
Proto Labs, Inc. 3.33%
APi Group Corporation 3.18%
Mueller Water Products, Inc. 3.13%
Astec Industries, Inc. 3.09%
EMCOR Group, Inc. 2.99%
SPX Corporation 2.97%
Navistar International Corporation 2.96%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 9/22/2020)3$0.0495
30-Day SEC Yield (as of 8/31/2020)40.43%
12-Month Distribution Rate (as of 8/31/2020)50.22%
Index Yield (as of 8/31/2020)60.98%
For funds with certain equity strategies, due to the negative economic impact across many industries caused by the recent COVID-19 outbreak, certain of the issuers of the securities included in the fund may elect to reduce the amount of dividends and/or distributions paid in the future. As a result, the "12-Month Distribution Rate," which is based on the fund's trailing 12-month ordinary distributions, will likely be higher, and in some cases significantly higher, than the actual 12-month distribution rate achieved by the fund.
Bid/Ask Midpoint vs. NAV (as of 6/30/2020)
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2020 23 0 0 0
3/31/2020 25 0 0 0
12/31/2019 36 0 0 0
9/30/2019 32 0 0 0
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2020 40 0 0 0
3/31/2020 37 0 0 0
12/31/2019 28 0 0 0
9/30/2019 32 0 0 0

The price used to calculate market return is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange, on which shares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated.

Top Industry Exposure (as of 9/18/2020)
Industrials 90.93%
Financials 9.07%
Month End Performance (as of 8/31/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
Net Asset Value (NAV) 15.59% -7.64% 6.89% 4.54% 10.31% N/A 4.96%
After Tax Held 15.59% -7.64% 6.81% 4.43% 10.18% N/A 4.83%
After Tax Sold 9.23% -4.52% 4.08% 3.45% 8.13% N/A 3.83%
Market Price 15.72% -7.54% 7.06% 4.55% 10.35% N/A 4.98%
Index Performance **
Richard Bernstein Advisors American Industrial Renaissance® Index 15.83% -7.14% 7.72% 5.28% 11.10% N/A 5.76%
S&P 500 Industrials Index 15.61% -3.25% 5.19% 6.18% 10.61% N/A 8.15%
Russell 2500® Index 11.83% -3.32% 6.79% 6.94% 8.54% N/A 6.82%
S&P 500 Index 15.48% 9.74% 21.94% 14.52% 14.46% N/A 12.36%
Quarter End Performance (as of 6/30/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
Net Asset Value (NAV) 20.90% -16.59% -8.10% 1.00% 6.20% N/A 3.41%
After Tax Held 20.90% -16.59% -8.18% 0.88% 6.07% N/A 3.28%
After Tax Sold 12.37% -9.82% -4.79% 0.72% 4.79% N/A 2.59%
Market Price 21.04% -16.66% -8.14% 1.04% 6.19% N/A 3.40%
Index Performance **
Richard Bernstein Advisors American Industrial Renaissance® Index 21.20% -16.26% -7.41% 1.70% 7.00% N/A 4.20%
S&P 500 Industrials Index 17.01% -14.64% -9.02% 1.91% 6.73% N/A 6.25%
Russell 2500® Index 26.56% -11.05% -4.70% 4.08% 5.41% N/A 5.61%
S&P 500 Index 20.54% -3.08% 7.51% 10.73% 10.73% N/A 10.51%
3-Year Statistics (as of 8/31/2020)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
AIRR 24.73% -1.98 1.03 0.23 0.94
S&P 500 Industrials Index 21.97% -0.20 0.91 0.30 0.93
Russell 2500® Index 22.56% --- 1.00 0.33 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.

After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are based on the midpoint of the bid/ask spread on the stock exchange on which shares of the fund are listed for trading as of the time that the fund’s NAV is calculated. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

**Performance information for the Richard Bernstein Advisors American Industrial Renaissance® Index is for illustrative purposes only and does not represent actual fund performance.
Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.

S&P 500 Industrials Index - The Index is an unmanaged index which includes the stocks in the industrials sector of the S&P 500 Index.

Russell 2500® Index - The Index is an unmanaged market-cap weighted index that includes the smallest 2,500 companies from the Russell 3000 Index.

S&P 500 Index - The Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares .
2 Fund shares are purchased and sold on an exchange at their market price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
4 The 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period and includes the effects of fee waivers and expense reimbursements, if applicable.
5 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution rates may vary.
6 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Richard Bernstein Advisors American Industrial Renaissance® Index.
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 3/10/2014

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

ETF Characteristics

The fund lists and principally trades its shares on The Nasdaq Stock Market LLC.

The fund's return may not match the return of the Richard Bernstein Advisors American Industrial Renaissance® Index.  Securities held by the fund will generally not be bought or sold in response to market fluctuations.

Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share's net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units. If the fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a discount to the fund's net asset value and possibly face delisting.

Risk Considerations

The fund's shares will change in value and you could lose money by investing in the fund. One of the principal risks of investing in the fund is market risk. Market risk is the risk that a particular security owned by the fund, fund shares or securities in general may fall in value. There can be no assurance that the fund's investment objective will be achieved. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The COVID-19 pandemic may last for an extended period of time, and will continue to impact the economy for the foreseeable future.

The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

The fund invests in industrials companies, financial companies and community banks. The fund is concentrated in securities of companies in the industrials sector which involves additional risks, including limited diversification. General risks of industrials companies include the general state of the economy, intense competition, consolidation, domestic and international politics, excess capacity and consumer demand and spending trends. In addition, they may be significantly affected by overall capital spending levels, economic cycles, technical obsolescence, delays in modernization, labor relations, and government regulations.

Financial companies are especially subject to the adverse effects of economic recession, currency exchange rates, government regulation, decreases in the availability of capital, volatile interest rates, portfolio concentrations in geographic markets and in commercial and residential real estate loans, and competition from new entrants in their fields of business. A community bank's financial performance may be highly dependent upon the business environment in certain geographic regions of the U.S.

First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund's distributor.

Richard Bernstein Advisors and Richard Bernstein Advisors American Industrial Renaissance® Index (“Index”) are trademarks and trade names of Richard Bernstein Advisors (“RBA”). The Fund is not sponsored, endorsed, sold or promoted by RBA and RBA makes no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of trading in the Fund. RBA’s only relationship to First Trust is the licensing of certain trademarks and trade names of RBA and of the Index, which is determined, composed and calculated by RBA without regard to First Trust or the Fund. RBA has no obligation to take the needs of First Trust or the owners of the Fund into consideration in determining, composing or calculating the Index. RBA is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of the Fund to be listed or in the determination or calculation of the equation by which the Fund is to be converted into cash. RBA has no obligation or liability in connection with the administration, marketing or trading of the Fund.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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