The reshoring story has moved from a talking point to a capex line item. Three exchange-traded funds offer different ways to position around it: First Trust RBA American Industrial Renaissance ETF (NASDAQ:AIRR | AIRR Price Prediction), Global X U.S. Infrastructure Development ETF (NYSEARCA:PAVE), and Industrial Select Sector SPDR Fund (NYSEARCA:XLI). Each captures a different slice of the same underlying shift, and the performance gap between them this year shows how much the slice matters.
Manufacturing value added reached $2,961.4 billion in the fourth quarter of 2025, accounting for 9.4% of GDP. Manufacturing profits totaled $759.6 billion in the same quarter, a 9.6% increase from a year earlier. Durable goods profits rose from $325.6 billion in the first quarter of 2025 to $433.4 billion by year‑end, a clear sign that capital‑equipment demand is doing most of the work behind the headline numbers.
The trade deficit also narrowed from December 2025 through March 2026, which aligns with more domestic production meeting demand that previously relied on imports. Against that backdrop, the three ETFs have separated sharply in their 2026 returns, and that spread remains the cleanest way to see how thematic purity shapes outcomes.
AIRR: the purest reshoring vehicle
AIRR is the fund built specifically around the reshoring thesis described in the CHIPS Act, Inflation Reduction Act, and infrastructure spending wave. It tracks the Richard Bernstein Advisors American Industrial Renaissance Index, which screens for small- and mid-cap US industrial companies and for community banks tied to industrial regions. The community-bank sleeve is the unusual part. The index methodology assumes that when factories get built in the Midwest and the Sun Belt, the regional lenders financing those projects benefit alongside the equipment makers and contractors.
That mechanism has produced the strongest returns of the three. AIRR is up about 33% year to date through May 5, with shares around $131. Over one year, the fund has returned 79%, and the five-year return sits at 212%. Those are the numbers of a concentrated thematic vehicle that caught a multi-year tailwind.
The tradeoff is concentration and size. AIRR holds a relatively narrow basket weighted toward smaller companies, which means a sharp reversal in capex sentiment or a credit event in regional banking would hit harder than it would a broad sector fund. The community-bank exposure adds interest-rate sensitivity that pure equipment-maker funds lack.
PAVE: the infrastructure backbone
PAVE plays the same theme one layer further out. Where AIRR targets the factories and the regional financing around them, PAVE targets the infrastructure that lets those factories operate: the rails moving raw materials, the aggregates going into foundations, the electrical equipment energizing new plants, and the contractors building it all. The fund manages roughly $12.4 billion across 106 positions, with no single name above 3.4% of assets.
The top holdings clearly show the strategy. Quanta Services sits at 3.4%, Deere at 3.4%, and Howmet Aerospace at 3.4%, with the three major railroads (Union Pacific, CSX, Norfolk Southern) collectively accounting for another around 9.6%. Heavyweights also go to Eaton, Trane, Parker-Hannifin, and Fastenal, so power infrastructure, HVAC, fluid systems, and industrial distribution are all represented. Materials exposure runs through Nucor, Vulcan, and Martin Marietta. The construction-services bench (Mastec, Jacobs, Aecom, Dycom) gives the fund direct access to project backlogs.
PAVE has returned about 20% year to date and 46% over one year, with shares near $57. The performance gap relative to AIRR reflects differences in market cap and concentration. PAVE is broader and includes large caps, so it captures the theme more steadily but with less amplification. The trade-off is exposure concentration in cyclical industrials and materials, which tend to draw down together when ISM data turns or when interest rates spike.
XLI: the broad industrial benchmark
XLI is the default industrial-sector ETF, tracking the S&P 500’s Industrial Select Sector Index of large-cap industrials. The portfolio spans aerospace and defense, machinery, transport, conglomerates, and capital goods. Holdings tend to be dominated by names like the major airlines, defense primes, parcel carriers, and diversified industrials. That broad mix is the point: XLI is the way to own the industrial sector without taking a specific bet on reshoring, infrastructure, or domestic manufacturing.
The performance reflects that. XLI is up about 11% year to date and 30% over the past year, with shares trading around $172. Returns have been roughly half of what AIRR delivered in 2026 and meaningfully behind PAVE. That underperformance is the cost of breadth. XLI’s defense and airline exposures are not directly tied to factory construction, and the index does not weight toward the small- and mid-cap names where reshoring effects are most pronounced.
The case for XLI within this theme is liquidity, low cost, and structural fit for investors seeking sector exposure without taking thematic risk. It is the quietest of the three funds, with the lowest dispersion in outcomes. The trade-off is already visible in the numbers. When the theme is working, the broader fund lags the targeted ones.
How the three fit different objectives
The three funds line up with three very different questions. AIRR is the answer for an investor who wants reshoring to be the entire point of the position and is willing to take on concentration risk and small‑cap volatility to maximize thematic exposure. PAVE is the answer for someone who wants to capture the infrastructure spending that surrounds reshoring, with broader diversification and a heavier tilt toward materials, rails, and electrical equipment. XLI is the answer for an investor who wants industrial‑sector exposure, with reshoring as a helpful tailwind rather than the core thesis.
The performance spread between the three funds, at 33%, 20%, and 11% year to date, shows how thematic specificity cuts both ways. It has rewarded AIRR holders this year. It would also magnify losses in a reversal, where XLI’s broader mix and lower beta would soften the move. PAVE sits between the two by design.
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