would it be smart to have both shld and xar, or is there to much overlap

While **SHLD** and **XAR** both focus on the defense technology sector, they have distinct differences in their holdings, performance, and investment approaches. Having both ETFs in your portfolio can provide diversification benefits and potentially enhance returns, depending on your investment strategy and risk tolerance.

1. **Diversification Benefits**:
- **Different Sector Focus**: **SHLD** has a stronger focus on defense technology, particularly in the areas of artificial intelligence and robotics, with a notable weighting in Palantir and RTX. **XAR**, on the other hand, has a broader aerospace and defense focus, with a higher weighting in commercial aircraft and missile defense.
- **Geographical Diversification**: **SHLD** has a more diversified geographic profile, with a significant weighting in European companies like Rheinmetall, while **XAR** is more U.S.-centric, with a higher weighting in U.S. companies like Lockheed Martin and BAE Systems.
2. **Overlap Analysis**:
- **Top Holdings Analysis**: While both ETFs have some overlap in their top holdings, the weight of these overlaps is relatively small. For example, Palantir is one of the largest holdings in **SHLD**, but it represents only 8.55% of the portfolio, and it is not among the top holdings in **XAR**.
- **Sector Allocation Analysis**: Although both ETFs have a focus on defense, **SHLD** has a stronger emphasis on technology and artificial intelligence, while **XAR** has a broader aerospace and defense focus. This difference in sector allocation can provide additional diversification benefits.
3. **Performance Considerations**:
- **Historical Performance**: **SHLD** has a stronger long-term performance record, with a 3-year percentage change of 23.13% compared to **XAR**'s 31.31%. However, **XAR** has a higher short-term performance, with a 1-month percentage change of 9.47% compared to **SHLD**'s 5.44%.
- **Risk Metrics**: **SHLD** has a higher maximum drawdown of 31.75% compared to **XAR**'s 31.31%, but it has also recovered faster, with a recovery days of 0 compared to **XAR**'s 1.
4. **Investment Strategy Considerations**:
- **SHLD** is better suited for investors seeking exposure to the growing defense technology sector, particularly in artificial intelligence and robotics. **XAR**, on the other hand, may be more appropriate for investors looking for broader exposure to the aerospace and defense industry.
- **SHLD**'s higher expense ratio of 0.5% compared to **XAR**'s 0.35% may be a consideration for cost-conscious investors.

In conclusion, having both **SHLD** and **XAR** in your portfolio can provide a diversified exposure to the defense technology sector, with each ETF addressing different aspects of the sector. However, it's important to consider your investment goals, risk tolerance, and the potential for overlap in your overall portfolio strategy.