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Should You Invest in the Invesco Aerospace & Defense ETF (PPA)?
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If you're interested in broad exposure to the Industrials - Aerospace & Defense segment of the equity market, look no further than the Invesco Aerospace & Defense ETF (PPA - Free Report) , a passively managed exchange traded fund launched on 10/26/2005.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $2.74 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. PPA seeks to match the performance of the SPADE Defense Index before fees and expenses.
The SPADE Defense Index is comprised of approximately 50 U.S. companies whose shares are listed on a U.S. Exchange. These are companies that are principally engaged in the research, development, manufacture, operation and support of defense, military, homeland security and space operations.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.58%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.66%.
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 94.20% of the portfolio.
Looking at individual holdings, Boeing Co/the (BA - Free Report) accounts for about 7.40% of total assets, followed by Rtx Corp (RTX - Free Report) and Lockheed Martin Corp (LMT - Free Report) .
The top 10 holdings account for about 52.95% of total assets under management.
Performance and Risk
The ETF return is roughly 2.12% so far this year and is up about 18.22% in the last one year (as of 02/12/2024). In that past 52-week period, it has traded between $77.02 and $94.11.
The ETF has a beta of 0.92 and standard deviation of 17.82% for the trailing three-year period, making it a medium risk choice in the space. With about 54 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco 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, PPA is a good 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 iShares U.S. Aerospace & Defense ETF (ITA - Free Report) tracks Dow Jones U.S. Select Aerospace & Defense Index. SPDR S&P Aerospace & Defense ETF has $1.96 billion in assets, iShares U.S. Aerospace & Defense ETF has $5.82 billion. XAR has an expense ratio of 0.35% and ITA charges 0.40%.
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 Invesco Aerospace & Defense ETF (PPA)?
If you're interested in broad exposure to the Industrials - Aerospace & Defense segment of the equity market, look no further than the Invesco Aerospace & Defense ETF (PPA - Free Report) , a passively managed exchange traded fund launched on 10/26/2005.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $2.74 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. PPA seeks to match the performance of the SPADE Defense Index before fees and expenses.
The SPADE Defense Index is comprised of approximately 50 U.S. companies whose shares are listed on a U.S. Exchange. These are companies that are principally engaged in the research, development, manufacture, operation and support of defense, military, homeland security and space operations.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.58%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.66%.
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 94.20% of the portfolio.
Looking at individual holdings, Boeing Co/the (BA - Free Report) accounts for about 7.40% of total assets, followed by Rtx Corp (RTX - Free Report) and Lockheed Martin Corp (LMT - Free Report) .
The top 10 holdings account for about 52.95% of total assets under management.
Performance and Risk
The ETF return is roughly 2.12% so far this year and is up about 18.22% in the last one year (as of 02/12/2024). In that past 52-week period, it has traded between $77.02 and $94.11.
The ETF has a beta of 0.92 and standard deviation of 17.82% for the trailing three-year period, making it a medium risk choice in the space. With about 54 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco 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, PPA is a good 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 iShares U.S. Aerospace & Defense ETF (ITA - Free Report) tracks Dow Jones U.S. Select Aerospace & Defense Index. SPDR S&P Aerospace & Defense ETF has $1.96 billion in assets, iShares U.S. Aerospace & Defense ETF has $5.82 billion. XAR has an expense ratio of 0.35% and ITA charges 0.40%.
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.