3 Top Performing Defense ETFs

| April 25, 2014 | 0 Comments

Aerospace & Defense (A&D)It seems like every time I turn on the news these days, it’s something about conflict.  There’s the war in Afghanistan, North Korea’s nuclear saber rattling, Iran’s quest for nuclear power, and now the crisis in Ukraine with Russia.

Needless to say, it’s unfortunate that war, conflict, and power struggles are a part of humanity. But as long as there are military endeavors, there will be an opportunity for ETF investors to make money in the Defense sector.

Every time foreign countries stir up trouble, demand for weapons, technological advancements, and international orders grows significantly. The U.S. has a policy to share military technology with its allies, thus creating an even bigger demand for U.S. aerospace and defense companies.

This increasing demand makes it easy to see why investing in ETFs in the Defense sector is a smart move.

Lets take a look three top performing ETFs in the defense sector.

iShares U.S. Aerospace & Defense ETF (ITA)

ITA is a top performing ETF in the Defense sector. At a current price of $108.64, ITA is up 50.76% on a 1-year return and an amazing 210.16% on a 5-year return.

The iShares U.S. Aerospace & Defense index measures the performance of the Aerospace and Defense sector of the U.S. market.

ITA currently holds 38 stocks and has an expense ratio of .48%. IT has a dividend yield of 1.07%.

As the name suggests, ITA contains U.S. stocks in the defense and aerospace industries. The majority of the stocks are industrial companies with 4% in the technology industry.

This ETF holds giants like Boeing Co (BA) and Lockheed Martin Corp. (LMT), which continue to have increasing demand for their military planes and equipment.

SPDR S&P Aerospace & Defense ETF (XAR)

XAR is another top performer in the Defense sector. With a current price of $100.97, it is up 3.70% this week and 51% on a 1-year return.

The SPDR S&P Aerospace & Defense Index represents the Aerospace and Defense sector of the S&P Total Market Index (S&P TMI). The index is one of 19 S&P Select Industry Indices.

XAR currently holds 36 stocks and has an expense ratio of .35%. It has a dividend payout of 1.95%.

The majority of XAR’s holdings are U.S. companies in the industrial industry with 7% in the technology industry. The top holdings for this ETF include Alliant Techsystems Inc (ATK), United Technologies Corp (UTX), and Boeing Co. (BA).

Power Shares Aerospace & Defense (PPA)

PPA is another top performing ETF in the Defense sector. It has a current price of $32.24 and is up 2.37% this week. It has a great return of 46.21% on a 1-year investment and a 171.79% return on a 5-year.

This index measures a group of companies involved in the development and support of the U.S. defense, homeland security, and aerospace operations.

It currently holds 52 stocks. It has an expense ratio of .60% and a dividend yield of 1.20%.

PPA holds some major players in the Defense sector. Companies like Honeywell International Ins. (HON), Raytheon Co. (RTN), and United Technologies Corp (UTX), are in its top holdings.

Here’s the thing…

The U.S. military isn’t going to stop investing in new technology.  That makes investing in this sector a great way to generate solid returns year in and year out. 

Good Investing,

Corey Williams

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Category: ETFs, Sector ETFs

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets three times a week. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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