Should You Invest in the SPDR S&P Aerospace & Defense ETF (XAR)?

Core Insights - The SPDR S&P Aerospace & Defense ETF (XAR) is designed for broad exposure to the Aerospace & Defense segment of the equity market, launched on September 28, 2011 [1] - XAR is a passively managed ETF favored by both institutional and retail investors due to its low costs, transparency, flexibility, and tax efficiency [1] Fund Overview - Sponsored by State Street Investment Management, XAR has over $3.91 billion in assets, making it one of the larger ETFs in its sector [3] - The ETF aims to match the performance of the S&P Aerospace & Defense Select Industry Index [3][4] Cost Structure - XAR has an annual operating expense ratio of 0.35%, positioning it as one of the least expensive options in the market [5] - The ETF offers a 12-month trailing dividend yield of 0.51% [5] Sector Exposure and Holdings - The ETF is fully allocated to the Industrials sector, with approximately 100% of its portfolio [6] - Rocket Lab Corp (RKLB) constitutes about 4.97% of total assets, with the top 10 holdings making up approximately 37.67% of total assets [7] Performance Metrics - As of August 12, 2025, XAR has increased by about 29.81% year-to-date and approximately 47.12% over the past year [8] - The ETF has traded between $144.94 and $222.95 in the last 52 weeks, with a beta of 1.11 and a standard deviation of 21.07% over the trailing three-year period, indicating medium risk [8] Alternatives - XAR holds a Zacks ETF Rank of 2 (Buy), indicating strong potential based on expected returns, expense ratio, and momentum [9] - Other ETFs in the sector include Invesco Aerospace & Defense ETF (PPA) with $6.08 billion in assets and iShares U.S. Aerospace & Defense ETF (ITA) with $9.06 billion in assets, with expense ratios of 0.57% and 0.4% respectively [10]