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.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many 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 3, placing it in top 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $7.35 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

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 0.39%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that 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, Rtx Corp (RTX) accounts for about 8.6% of total assets, followed by Boeing Co/the (BA) and General Electric Co (GE).

The top 10 holdings account for about 56.6% of total assets under management.

Performance and Risk

The ETF has gained about 7.41% and it's up approximately 47.54% so far this year and in the past one year (as of 01/07/2026), respectively. PPA has traded between $105.2 and $168.23 during this last 52-week period.

The ETF has a beta of 0.78 and standard deviation of 16.39% for the trailing three-year period, making it a medium risk choice in the space. With about 60 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 sufficient 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.

Global X Defense Tech ETF (SHLD) tracks GLOBAL X DEFENSE TECH INDEX and the iShares U.S. Aerospace & Defense ETF (ITA) tracks Dow Jones U.S. Select Aerospace & Defense Index. Global X Defense Tech ETF has $5.62 billion in assets, iShares U.S. Aerospace & Defense ETF has $13.77 billion. SHLD has an expense ratio of 0.5%, and ITA charges 0.38%.

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.