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

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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 6, placing it in top 38%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $1.43 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

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

It has a 12-month trailing dividend yield of 0.37%.

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 96.1% of the portfolio.

Looking at individual holdings, Lockheed Martin Corporation (LMT) accounts for about 9.49% of total assets, followed by Rtx Corporation (RTX) and General Dynamics Corporation (GD).

The top 10 holdings account for about 61.84% of total assets under management.

Performance and Risk

Year-to-date, the First Trust Indxx Aerospace & Defense ETF has gained about 3.43% so far, and is up roughly 44.53% over the last 12 months (as of 03/30/2026). MISL has traded between $27.51 and $51.01 in this past 52-week period.

The ETF has a beta of 0.66 and standard deviation of 18.34% 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.

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 $8.02 billion in assets, iShares U.S. Aerospace & Defense ETF has $13.13 billion. SHLD has an expense ratio of 0.5%, and ITA charges 0.38%.

Bottom Line

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