Aerospace & Defense Invesco ETF (PPA Quick QuotePPA - Free Report) is probably on the radar for investors seeking momentum. The fund just hit a 52-week high and moved up 21.14% from its 52-week low price of $76.25/share.

Are more gains in store for this ETF? Let us take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed.

PPA in Focus

The underlying 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. The product charges 58 bps in annual fees (see: all Industrials ETFs).

Why the Move?

The Aerospace and Defense sector has been an area to watch lately, given the escalating geopolitical tensions. Major defense corporations have shifted their stance significantly, with many anticipating robust demand in 2024.

Recently, President Joe Biden signed the U.S. defense policy bill that authorizes a record allowance of $886 billion in military spending, marking an increase of 3% in the nation's total national security budget. This is a key tailwind for the fund.

More Gains Ahead?

Currently, PPA has a Zacks ETF Rank #3 (Hold) and a Medium risk outlook. However, it might continue its strong performance in the near term, with a positive weighted alpha of 20.60, which gives cues of a further rally.