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Should You Invest in the iShares U.S. Aerospace & Defense ETF (ITA)?
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Launched on 05/01/2006, the iShares U.S. Aerospace & Defense ETF (ITA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Aerospace & Defense segment of the equity market.
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.
Additionally, sector ETFs offer convenient ways 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 $4.21 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 99.50% of the portfolio.
Looking at individual holdings, Raytheon Technologies Corp (RTX - Free Report) accounts for about 20.96% of total assets, followed by Lockheed Martin Corp (LMT - Free Report) and Boeing (BA - Free Report) .
The top 10 holdings account for about 66.39% of total assets under management.
Performance and Risk
The ETF has added roughly 5.27% and was up about 2.29% so far this year and in the past one year (as of 11/17/2022), respectively. ITA has traded between $91.19 and $112.95 during this last 52-week period.
The ETF has a beta of 1.07 and standard deviation of 32.82% for the trailing three-year period, making it a medium risk choice in the space. With about 40 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.
SPDR S&P Aerospace & Defense ETF (XAR - Free Report) tracks S&P Aerospace & Defense Select Industry Index and the Invesco Aerospace & Defense ETF (PPA - Free Report) tracks SPADE Defense Index. SPDR S&P Aerospace & Defense ETF has $1.33 billion in assets, Invesco Aerospace & Defense ETF has $1.65 billion. XAR has an expense ratio of 0.35% and PPA charges 0.58%.
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)?
Launched on 05/01/2006, the iShares U.S. Aerospace & Defense ETF (ITA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Aerospace & Defense segment of the equity market.
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.
Additionally, sector ETFs offer convenient ways 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 $4.21 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 99.50% of the portfolio.
Looking at individual holdings, Raytheon Technologies Corp (RTX - Free Report) accounts for about 20.96% of total assets, followed by Lockheed Martin Corp (LMT - Free Report) and Boeing (BA - Free Report) .
The top 10 holdings account for about 66.39% of total assets under management.
Performance and Risk
The ETF has added roughly 5.27% and was up about 2.29% so far this year and in the past one year (as of 11/17/2022), respectively. ITA has traded between $91.19 and $112.95 during this last 52-week period.
The ETF has a beta of 1.07 and standard deviation of 32.82% for the trailing three-year period, making it a medium risk choice in the space. With about 40 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.
SPDR S&P Aerospace & Defense ETF (XAR - Free Report) tracks S&P Aerospace & Defense Select Industry Index and the Invesco Aerospace & Defense ETF (PPA - Free Report) tracks SPADE Defense Index. SPDR S&P Aerospace & Defense ETF has $1.33 billion in assets, Invesco Aerospace & Defense ETF has $1.65 billion. XAR has an expense ratio of 0.35% and PPA charges 0.58%.
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.