Launched on October 25, 2022, the First Trust Indxx Aerospace & Defense ETF (MISL Quick QuoteMISL - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Aerospace & Defense segment of the equity market.

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.

Additionally, sector ETFs offer convenient 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 2, placing it in top 13%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $1.6 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. MISL seeks to match the performance of the INDXX US AEROSPACE & DEFENSE INDEX before fees and expenses.

The Indxx US Aerospace & Defense Index consists of a universe of U.S. companies engaged in business activities associated with certain aerospace and defense sub-themes.

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 0.6%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.34%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 95.2% of the portfolio.

Looking at individual holdings, Rtx Corporation (RTX) accounts for about 9% of total assets, followed by The Boeing Company (BA) and Ge Aerospace (GE).

The top 10 holdings account for about 62.4% of total assets under management.

Performance and Risk

The ETF has gained about 15.84% so far this year and is up roughly 53.66% in the last one year (as of 01/26/2026). In that past 52-week period, it has traded between $27.51 and $51.01.

The ETF has a beta of 0.67 and standard deviation of 17.69% for the trailing three-year period. With about 39 holdings, it has more concentrated exposure than peers.

Alternatives

First Trust Indxx 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, MISL 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.

Invesco Aerospace & Defense ETF (PPA) tracks SPADE Defense Index and the iShares U.S. Aerospace & Defense ETF (ITA) tracks Dow Jones U.S. Select Aerospace & Defense Index. Invesco Aerospace & Defense ETF has $7.84 billion in assets, iShares U.S. Aerospace & Defense ETF has $14.71 billion. PPA has an expense ratio of 0.58%, and ITA charges 0.38%.

Bottom Line

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