First Trust Advisors L.P. has launched the First Trust RBA Deglobalization ETF, designed to track U.S. companies expected to benefit from the global shift toward local production and reduced reliance on international supply chains. The fund seeks results corresponding to the RBA U.S. Deglobalization Index before fees and expenses.
Deglobalization, marked by declining international trade, investment and dependence on global supply chains, is reshaping the markets.
“DGLO targets companies poised to benefit from this shift, many of which are overlooked by ETFs tracking broad market indices,” said Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust.
The RBA U.S. Deglobalization Index focuses on U.S.-based companies in sectors such as industrial, energy, materials, aerospace and defense, transportation and cybersecurity, which the index provider believes are positioned to benefit from increased globalization and geopolitical tensions. Companies included must meet specific criteria, including a high percentage of U.S., derived revenue, a positive 23-month forward earnings estimate, a Net Debt-to-EBITDA ratio lower than the sub-industry average and in some cases, exposure to the aerospace and defense sector.
“Investors now have the opportunity to invest in a major structural shift in the economy via a broad range of companies that could benefit from deglobalization,” said Richard Berstein, CEO, CIO at Richard Bernstein Advisors.
