If you're interested in broad exposure to the Industrials - Aerospace & Defense segment of the equity market, look no further than the First Trust Indxx Aerospace & Defense ETF (MISL Quick QuoteMISL - Free Report) , a passively managed exchange traded fund launched on October 25, 2022.

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.

Investor-friendly, sector ETFs provide many options 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 $771.54 million, making it one of the average sized 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 0.07%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 74.6% of the portfolio. Information Technology and Telecom round out the top three.

Looking at individual holdings, Palantir Technologies Inc. (class A) (PLTR) accounts for about 11.24% of total assets, followed by Rtx Corporation (RTX) and Space Exploration Technologies Corp. (class A) (SPCX).

The top 10 holdings account for about 63.03% of total assets under management.

Performance and Risk

The ETF has lost about 2.46% so far this year and is down about 3.32% in the last one year (as of 10/08/2026). In that past 52-week period, it has traded between $39.329 and $51.01.

The ETF has a beta of 0.71 and standard deviation of 20.54% for the trailing three-year period. With about 40 holdings, it has more concentrated exposure than peers.

Alternatives

First Trust Indxx 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, MISL is an outstanding 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.

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 $7.45 billion in assets, iShares U.S. Aerospace & Defense ETF has $11.88 billion. PPA has an expense ratio of 0.58%, and ITA charges 0.37%.

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.