Should You Invest in the Invesco Aerospace & Defense ETF (PPA)?

Launched on October 26, 2005, the Invesco Aerospace & Defense ETFPPA-- (PPA) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Aerospace & Defense segment of the equity market.

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.

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 3, placing it in top 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $8.29 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. PPAPPA-- 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

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 0.58%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.36%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector -- about 93.9% of the portfolio.

The top 10 holdings account for about 61.39% of total assets under management.

Performance and Risk

Year-to-date, the Invesco Aerospace & Defense ETF has added about 15.59% so far, and it's up approximately 56.94% over the last 12 months (as of 03/10/2026). PPA has traded between $105.2 and $185.59 in this past 52-week period.

The ETF has a beta of 0.76 and standard deviation of 16.88% for the trailing three-year period, making it a medium risk choice in the space. With about 63 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 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 $8.08 billion in assets, iShares U.S. Aerospace & Defense ETF has $16.15 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.

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This article originally published on Zacks Investment Research (zacks.com).

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