Is Investing in the Invesco Aerospace & Defense ETF (PPA) a Good Choice?

Overview of Invesco Aerospace & Defense ETF (PPA)

Debuting on October 26, 2005, the Invesco Aerospace & Defense ETF (PPA) is a passively managed fund that aims to capture the performance of the Industrials sector, specifically focusing on Aerospace & Defense companies.

Passively managed ETFs like PPA are favored by both institutional and individual investors for their cost-effectiveness, transparency, adaptability, and tax advantages, making them a solid choice for long-term portfolios.

Sector-based ETFs offer investors a convenient way to access a wide range of companies within a specific industry, reducing risk through diversification. The Industrials - Aerospace & Defense sector is one of 16 major categories in the Zacks Industry system and currently holds a strong position, ranking in the top 19% at number 3.

Fund Details and Index Composition

Managed by Invesco, PPA has accumulated over $8.29 billion in assets, positioning it among the largest funds targeting the Aerospace & Defense segment. The ETF seeks to mirror the performance of the SPADE Defense Index, before fees and expenses.

The SPADE Defense Index includes about 50 U.S.-listed companies that are primarily involved in defense, military, homeland security, and space-related activities, covering research, development, manufacturing, operations, and support.

Expense Structure

When choosing an ETF, cost is a crucial consideration. Lower expense ratios can lead to better returns if other factors are equal.

• Annual operating expense: 0.58%, which is comparable to similar funds in the sector.
• 12-month trailing dividend yield: 0.36%.

Sector Allocation and Major Holdings

Although ETFs help spread out risk, it's still important to review the underlying holdings. Most ETFs, including PPA, provide daily transparency of their portfolios.

• Industrials sector makes up approximately 93.9% of the fund's assets.
• Top holdings include Lockheed Martin Corp (LMT) at about 9%, followed by Boeing Co/the (BA) and RTX Corp (RTX).
• The ten largest positions represent roughly 61.39% of total assets.

Performance and Risk Profile

So far this year, PPA has gained around 15.59%, and over the past year (as of 03/10/2026), it has risen by about 56.94%. During the last 52 weeks, the ETF's price has ranged from $105.2 to $185.59.

With a beta of 0.76 and a three-year standard deviation of 16.88%, PPA is considered a moderate-risk investment. The fund holds about 63 different stocks, helping to reduce company-specific risk.

Other ETF Alternatives

PPA holds a Zacks ETF Rank of 3 (Hold), reflecting factors such as expected returns, fees, and momentum. It is a strong candidate for investors seeking exposure to the Industrials sector, but there are other notable options:

• Global X Defense Tech ETF (SHLD): Tracks the GLOBAL X DEFENSE TECH INDEX, with $8.08 billion in assets and a 0.5% expense ratio.
• iShares U.S. Aerospace & Defense ETF (ITA): Follows the Dow Jones U.S. Select Aerospace & Defense Index, holding $16.15 billion in assets and charging a 0.38% expense ratio.

Conclusion

For more information on this ETF and others, you can explore products that align with your investment goals and stay updated with the latest ETF news by visiting the Zacks ETF Center.