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Should You Invest in the iShares U.S. Aerospace & Defense ETF (ITA)?
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Looking for broad exposure to the Industrials - Aerospace & Defense segment of the equity market? You should consider the iShares U.S. Aerospace & Defense ETF (ITA - Free Report) , a passively managed exchange traded fund launched on 05/01/2006.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $3.60 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. ITA seeks to match the performance of the Dow Jones U.S. Select Aerospace & Defense Index before fees and expenses.
The Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.42%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.71%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 99.30% of the portfolio.
Looking at individual holdings, Raytheon Technologies Corp (RTX - Free Report) accounts for about 22.61% of total assets, followed by Boeing (BA - Free Report) and Lockheed Martin Corp (LMT - Free Report) .
The top 10 holdings account for about 76.86% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Aerospace & Defense ETF has lost about -6.27% so far, and is down about -4.37% over the last 12 months (as of 05/13/2022). ITA has traded between $95.53 and $112.95 in this past 52-week period.
The ETF has a beta of 1.11 and standard deviation of 31.73% for the trailing three-year period, making it a medium risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Aerospace & Defense ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ITA is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco Aerospace & Defense ETF (PPA - Free Report) tracks SPADE Defense Index and the SPDR S&P Aerospace & Defense ETF (XAR - Free Report) tracks S&P Aerospace & Defense Select Industry Index. Invesco Aerospace & Defense ETF has $1.24 billion in assets, SPDR S&P Aerospace & Defense ETF has $1.29 billion. PPA has an expense ratio of 0.61% and XAR charges 0.35%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the iShares U.S. Aerospace & Defense ETF (ITA)?
Looking for broad exposure to the Industrials - Aerospace & Defense segment of the equity market? You should consider the iShares U.S. Aerospace & Defense ETF (ITA - Free Report) , a passively managed exchange traded fund launched on 05/01/2006.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $3.60 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. ITA seeks to match the performance of the Dow Jones U.S. Select Aerospace & Defense Index before fees and expenses.
The Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.42%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.71%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 99.30% of the portfolio.
Looking at individual holdings, Raytheon Technologies Corp (RTX - Free Report) accounts for about 22.61% of total assets, followed by Boeing (BA - Free Report) and Lockheed Martin Corp (LMT - Free Report) .
The top 10 holdings account for about 76.86% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Aerospace & Defense ETF has lost about -6.27% so far, and is down about -4.37% over the last 12 months (as of 05/13/2022). ITA has traded between $95.53 and $112.95 in this past 52-week period.
The ETF has a beta of 1.11 and standard deviation of 31.73% for the trailing three-year period, making it a medium risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Aerospace & Defense ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ITA is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco Aerospace & Defense ETF (PPA - Free Report) tracks SPADE Defense Index and the SPDR S&P Aerospace & Defense ETF (XAR - Free Report) tracks S&P Aerospace & Defense Select Industry Index. Invesco Aerospace & Defense ETF has $1.24 billion in assets, SPDR S&P Aerospace & Defense ETF has $1.29 billion. PPA has an expense ratio of 0.61% and XAR charges 0.35%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.