xar stock: SPDR Aerospace & Defense ETF Guide

This guide explains XAR (SPDR S&P Aerospace & Defense ETF), its objective, index methodology, holdings, performance drivers, risks, fees, and how investors commonly use the fund. Includes a dated m...

2024-07-15 04:36:00

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XAR (SPDR S&P Aerospace & Defense ETF)

XAR stock refers to the State Street/SPDR exchange-traded fund that provides targeted exposure to the U.S. aerospace and defense industry and trades under the ticker XAR on U.S. exchanges. This article explains what XAR stock is, how the fund operates, its holdings, performance drivers, risks, fees, and common investor uses. Readers will gain a practical, beginner-friendly understanding of the ETF and where to find official documentation.

Overview

XAR is an exchange-traded fund issued by State Street Global Advisors under the SPDR family. The fund's primary objective is to track an equal-weighted S&P aerospace & defense industry index (often described as an S&P Aerospace & Defense Select Industry index or similar S&P industry segment). XAR stock trades on major U.S. exchanges under the ticker XAR and was launched on September 28, 2011. Importantly, XAR is an ETF — a pooled fund vehicle — not an individual company stock.

This overview frames what investors are buying when they buy XAR stock: diversified exposure to aerospace and defense companies rather than ownership of any single firm.

Investment objective and index methodology

XAR seeks to replicate the performance of an S&P industry index focused on aerospace and defense companies using an equal-weighting approach. The index methodology typically applies the following principles:

Equal-weighting: Constituents are assigned approximately equal weights at each rebalancing, rather than being weighted by market capitalization. This produces higher relative exposure to mid- and small-cap names compared with cap-weighted aerospace & defense funds.
Physical replication / sampling: The fund holds a basket of securities intended to represent the index, usually through full replication where possible or sampling when necessary to match risk and return characteristics.
Rebalancing rules: The index is rebalanced periodically (for example, quarterly) to restore equal weights and to reflect additions or removals from the S&P industry classification.
Weighting targets and constraints: Some descriptions of the underlying S&P industry index may reference target exposures across large-, mid- and small-cap segments (for example, a stated 40/40/20 emphasis). These are target allocations embedded in the index design to balance exposure across firm sizes within the sector.

Because XAR stock follows an equal-weight index, its performance profile differs from cap-weighted aerospace & defense ETFs: equal weighting increases the potential influence of smaller companies and can raise volatility and turnover at rebalance dates.

Fund profile and key facts

Investors commonly look for a concise fact set when evaluating XAR stock. Typical key facts include:

Issuer: State Street Global Advisors (SPDR family).
Ticker: XAR.
Exchange listing: Listed on major U.S. exchange(s) (trades intraday like a stock).
Inception date: September 28, 2011.
Expense ratio: Approximately 0.35% (reported; check the latest fund documents for updates).
Number of holdings: Roughly 40–45 names (about 41 holdings reported in many summaries; exact count evolves with index changes).
Base currency: USD.
Distribution policy: Periodic dividend distributions; yield varies with underlying payouts.
Assets under management (AUM): Typically in the multi‑hundreds of millions to multi‑billion USD range; AUM fluctuates with flows and market moves.

Note for editors: numerical facts such as expense ratio, number of holdings and AUM change over time and should be refreshed from the official fund fact sheet before publishing.

Holdings and sector composition

XAR stock holds U.S.-listed aerospace and defense companies across the industry supply chain. Typical holdings include prime defense contractors, avionics and systems suppliers, small-launch and space systems firms, and aerospace technology companies.

Examples of frequently held names (representative, not exhaustive) are:

Lockheed Martin
Boeing
Northrop Grumman
L3Harris Technologies
AeroVironment
Rocket Lab
Kratos Defense & Security
Other U.S.-listed aerospace suppliers and technology firms

Because XAR uses equal weighting, mid- and small-cap companies make up a larger share of the portfolio compared with cap-weighted competitors. That means XAR stock often has meaningful allocations to growth-oriented small-cap aerospace names and newer space companies in addition to the large defense primes.

Top holdings (example)

A snapshot of the top 10 holdings by weight will change at each rebalance and over time. As an illustrative example only, a top-10 list for XAR stock may include the large defense primes and several mid/small-cap space firms; exact weights must be checked on the fund fact sheet or holdings page at the time of interest.

Geographic and industry exposure

XAR stock provides predominantly U.S.-listed aerospace and defense equities exposure, with industry focus on defense contractors, aircraft manufacturers, space launch and systems companies, and related industrial suppliers.

Performance

Performance for XAR stock is reported in multiple ways:

Price return: Change in the ETF's market price on the exchange.
NAV return: Change in net asset value per share, reflecting underlying holdings.
Total return: NAV return including reinvested dividends and distributions.

Common performance metrics investors examine include year-to-date (YTD), 1-year, 3-year and 5-year returns, as well as cumulative returns since inception. XAR stock performance is influenced by:

Defense spending cycles and government procurement budgets.
Aerospace commercial cycles (airline demand, supply chain dynamics).
Geopolitical events that change defense priorities and budgets.
Industry innovation (space launch demand, satellite services).
Broader equity market trends and macroeconomic conditions.

Because XAR is equal-weighted, short-term performance may diverge materially from cap-weighted aerospace ETFs when smaller, higher-volatility names move sharply.

Dividends and tax considerations

XAR stock distributes dividends periodically based on dividends received from underlying holdings. Key points on distributions and tax treatment:

Yield varies: The fund's trailing yield depends on the dividend policies of constituent companies and the fund's weighting.
Ex-dividend dates and payment schedules: Providers report these dates on the fund's official pages; investors should consult the fund fact sheet or distribution history.
Tax treatment: For U.S.-domiciled equity ETFs like XAR, dividends are typically treated per U.S. tax rules for qualified and non-qualified dividends; capital gains distributions may occur if the fund realizes gains. Investors should consult tax advisors for personal tax treatment.

Risks and volatility

Key risks associated with XAR stock include:

Sector concentration risk: XAR focuses on a single industry group, increasing exposure to industry-specific shocks.
Higher volatility: Equal-weighting increases exposure to mid- and small-cap companies, often resulting in greater short-term price swings than broad-market ETFs.
Geopolitical sensitivity: Changes in geopolitical tensions and defense budgets can materially affect constituent revenues.
Company-specific contract risk: Winning or losing major defense contracts can dramatically change a company’s near-term outlook.
Tracking error and turnover: Rebalancing and sampling can introduce tracking error relative to the underlying index.

Investors should weigh these risks against their portfolio objectives and diversification needs.

Comparison with similar ETFs

XAR stock can be compared with other aerospace & defense or industrial sector ETFs. Differences to consider when comparing funds:

Weighting scheme: XAR uses equal weighting, while alternatives like cap-weighted funds put larger emphasis on the biggest primes.
Expense ratio: Compare expense ratios—XAR has historically reported about 0.35%—and note alternatives may be more or less expensive.
Holdings concentration: Equal-weighted funds often hold more mid- and small-cap companies; cap-weighted funds concentrate in the largest market-cap firms.
Thematic tilt: Some funds emphasize space/technology or broader industrial exposure differently.

When evaluating peers, check the full prospectus and up-to-date holdings to understand structural differences.

Trading and liquidity

XAR stock is listed and trades intraday on U.S. exchanges under the ticker XAR. Trading characteristics include:

Intraday tradability like an ordinary stock, enabling limit orders, market orders and intraday strategies.
Average daily volume and bid/ask spreads: Liquidity varies with market conditions; investors should check recent average daily volume and spreads before trading.
Options: Where available, options can provide trading flexibility; verify option chain availability with your broker.

For users of Bitget products and services, XAR stock holdings or related derivatives may be monitored and traded through appropriate market offerings; consult Bitget's platform for specific product availability and trading mechanics.

Fees, expenses and fund structure

XAR is typically structured as an open-end ETF. Fee and cost considerations include:

Expense ratio: Approximately 0.35% (confirm current figure from the official fact sheet).
Brokerage costs: Trading commissions, spreads and platform fees may apply depending on the broker used.
Creation/redemption mechanism: As an ETF, XAR benefits from the creation and redemption process that helps keep market price close to NAV, but intraday premiums/discounts can still occur.
Long-term effects: Fees compound and reduce long-term returns; compare fee levels when choosing among similar funds.

Historical highlights and notable events

XAR stock performance has historically reacted to periods of increased defense spending, geopolitical developments, and industry cycles such as commercial aerospace demand shifts. Notable types of events that have influenced the fund include:

Periods of increased defense appropriations that lift large defense contractors.
Technological or commercial launches and breakthroughs in space companies that affect small-cap constituents.
Major inflows or outflows into sector ETFs that can move AUM and liquidity.

Specific facts and notable episodes (inflows, AUM swings, rebalances) should be checked in the fund’s semi-annual reports, fact sheets, and reputable financial news sources for precise dates and magnitudes.

How investors typically use XAR

Investors use XAR stock in several ways:

Tactical sector exposure: Investors seeking a concentrated bet on aerospace & defense may use XAR for a tactical overweight.
Thematic allocation: Those interested in space and defense themes may allocate a portion of portfolio risk to XAR as a theme play.
Trading and volatility plays: Because of higher mid/small cap exposure, traders sometimes use XAR for momentum or rotational strategies.
Complement to broad equity holdings: Some investors add XAR to diversify across industry exposures while keeping core allocations in broad-market funds.

Suitability considerations: XAR stock is generally better suited to investors comfortable with sector concentration, potential higher volatility, and shorter-term swings. This article does not provide investment advice.

Governance, provider and documentation

Issuer and governance:

Provider: State Street Global Advisors, issuer of the SPDR ETF family, manages XAR and maintains fund governance documentation.
Official documents: Prospectus, statement of additional information, fund fact sheet, holdings and regulatory filings are the authoritative sources for fund mechanics and risks.

Investors should review the prospectus and latest fact sheet before buying XAR stock to understand fees, holdings, distributions and legal disclosures.

Criticism and academic/market commentary

Common critiques and market commentary surrounding XAR stock include:

Narrow sector focus: Critics argue single-sector ETFs risk underperformance when the sector lags the broader market.
Redundancy with broad funds: Investors holding diversified large-cap funds may already have significant indirect exposure to major defense primes, making XAR potentially duplicative.
Political and regulatory sensitivity: While this article avoids political discussion, analysts note regulatory or budgetary changes can materially affect defense firms. (This is a market comment, not a political stance.)

ETF research providers and academic studies periodically evaluate sector ETFs on diversification benefits, turnover, and long-term risk-adjusted returns.

References and external sources

Authoritative and up‑to‑date information sources for XAR stock include the fund’s official SPDR page, the prospectus, fund fact sheet, regulatory filings, and established financial data providers and news platforms. Always verify numerical facts (expense ratio, holdings, AUM) on the fund’s official pages before publication.

Market note: Rocket Lab exposure in XAR (dated)

As of Jan 26, 2026, according to Benzinga, Rocket Lab Corporation (RKLB) was reported to carry meaningful weight in several aerospace/defense ETFs, including XAR. Benzinga reported that Rocket Lab had a 5.66% weight in XAR at that time. The same report noted a mix of operational updates for Rocket Lab: a successful Electron mission and a hydrostatic test failure on a Neutron Stage 1 tank on Jan 21, 2026. The company stated the tank was pushed beyond expected flight loads during testing, production of a replacement tank had begun, and further timeline commentary was expected on an upcoming earnings call.

This market event illustrates how single-company developments—especially for small- and mid-cap space firms—can influence XAR stock performance because of the fund's equal-weighting and higher relative exposure to such names. Investors and editors should check the fund holdings page and third-party data for the current weight of Rocket Lab and any subsequent developments.

Source: As of Jan 26, 2026, Benzinga reporting and fund holdings summaries.

Notes for editors

Numerical data (expense ratio, holdings count, AUM, yield) change often. Update these items from the official SPDR XAR fact sheet and prospectus at the time of publication.
Rebalance dates and methodology details should be confirmed from the index methodology documents provided by S&P and State Street.
When referencing market news (for example, the Rocket Lab note above), include the reporting date and the news source.