Investors seeking momentum may have SPDR S&P Aerospace & Defense ETF (XAR Quick QuoteXAR - Free Report) on radar now. The fund recently hit a new 52-week high. Shares of XAR are up approximately 41.7% from the 52-week low of $55.72/share.

But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.

XAR in Focus

XAR focuses on providing exposure to aerospace and defense companies in the U.S. equity market. It charges 35 basis points in fee per year and has top holdings in Orbital ATK Inc. , KLX Inc. and Triumph Group Inc. (TGI Quick QuoteTGI - Free Report) with 4.4%, 4.0% and 3.9% allocation, respectively (as of Sep 20, 2017) (see all Industrials ETFs here).

Why the Move?

Lately, the defense sector has been in the spotlight. Following repeated missile tests by North Korea, President Donald Trump threatened to destroy the nation completely. This prompted North Korean leader Kim Jong-Un to warn the United States of the "highest level of hard-line countermeasure in history”. Moreover, North Korea’s foreign minister suggested that another hydrogen bomb test in the Pacific Ocean might be in the cards. Increasing tensions relating to North Korea have brought these sector ETFs into play again. Moreover, the earnings season has also been quite impressive for companies in this sector.

More Gains Ahead?

Currently, XAR has a Zacks ETF Rank #1 (Strong Buy) with a Medium Risk outlook. Moreover, the ETF has a weighted alpha of 37.30. So, there is a promising outlook ahead for those who want to ride this surging ETF a shade further.

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