Designed to provide broad exposure to the Industrials - Aerospace & Defense segment of the equity market, the Invesco Aerospace & Defense ETF (PPA Quick QuotePPA - Free Report) is a passively managed exchange traded fund launched on October 26, 2005.

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.

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 2, placing it in top 13%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $6.22 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.57%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.44%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector -- about 93.1% of the portfolio.

Looking at individual holdings, Boeing Co/the (BA) accounts for about 8.31% of total assets, followed by General Electric Co (GE) and Rtx Corp (RTX).

The top 10 holdings account for about 56.49% of total assets under management.

Performance and Risk

Year-to-date, the Invesco Aerospace & Defense ETF has gained about 29.15% so far, and is up roughly 30.94% over the last 12 months (as of 09/02/2025). PPA has traded between $105.2 and $149.34 in this past 52-week period.

The ETF has a beta of 0.87 and standard deviation of 17.11% for the trailing three-year period, making it a medium risk choice in the space. With about 56 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco Aerospace & Defense ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PPA is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

SPDR S&P Aerospace & Defense ETF (XAR) tracks S&P Aerospace & Defense Select Industry Index and the iShares U.S. Aerospace & Defense ETF (ITA) tracks Dow Jones U.S. Select Aerospace & Defense Index. SPDR S&P Aerospace & Defense ETF has $3.97 billion in assets, iShares U.S. Aerospace & Defense ETF has $9.32 billion. XAR has an expense ratio of 0.35%, and ITA charges 0.38%.

Bottom Line

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