Solid Earnings Results Are Driving Aerospace & Defense ETFs

and support of US defense, homeland security and aerospace operations. It is the oldest product in the space PPA with an inception date of October 26, 2005.

Per sponsor’s website, sector allocations as of July 26, 2013 were Industrials (81%), Information Technology (16%) and Materials (3%).

The product has managed to garner $61.3 million in assets so far, which are currently invested in 48 securities. It charges 66 basis points in expenses and pays out dividends at an attractive yield of 2.1%.

PPA is a Zacks Rank#2 (Buy) ETF.

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

ITA which made it debut in May 2006 is currently the largest ETF in the space with $115.4 million in assets. It charges annual fee of 47 basis points per year while the dividend yield is pretty nice at 1.8% urgently.

The fund holds 35 securities in its basket with United Technologies (9.5%), Boeing (8.3%), Precision Castparts (6.1%) and  Lockheed Martin (6.1%) being the top holdings. Aerospace takes about 55% of the asset base while Defense accounts for the rest 45%.

ITA is a Zacks Rank#1 (Strong Buy) ETF.

SPDR S&P Aerospace & Defense ETF (NYSEARCA:XAR)

Launched in September 2011, this product tracks S&P Aerospace and Defense Select Industry index, which is a modified equal weight index.

This product has attracted AUM of $20.86 M so far. It holds 36 securities with weighted average market cap of $19.7 billion. It charges 35 basis points in expenses and has a decent dividend yield of 1.31% currently.

Spirit AeroSystems Holdings, Alliant Techsystems, United Technologies and Lockheed Martin are the top holdings but being modified equal weighted, the fund is pretty well diversifies with these top holdings accounting for just 18.3% of the asset base.

XAR is a Zacks Rank#1 (Strong Buy) ETF.

This article is brought to you courtesy of Neena Mishra From Zacks.

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