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

Core Insights - The Invesco Aerospace & Defense ETF (PPA) provides broad exposure to the Aerospace & Defense segment of the equity market, appealing to both retail and institutional investors due to its low costs, transparency, flexibility, and tax efficiency [1][2] Fund Overview - Launched on October 26, 2005, PPA has amassed over $6.22 billion in assets, making it one of the largest ETFs in its sector [3] - The fund aims to match the performance of the SPADE Defense Index, which includes approximately 50 U.S. companies involved in defense, military, homeland security, and space operations [4] Cost Structure - PPA has an annual operating expense ratio of 0.57%, which is competitive within its peer group, and a 12-month trailing dividend yield of 0.44% [5] Sector Exposure and Holdings - The ETF has a significant allocation in the Industrials sector, approximately 93.1% of its portfolio, with Boeing Co (BA) representing about 8.31% of total assets, followed by General Electric Co (GE) and RTX Corp (RTX) [6] - The top 10 holdings constitute around 56.49% of total assets under management [7] Performance Metrics - Year-to-date, PPA has gained approximately 29.15%, and it is up about 30.94% over the last 12 months as of September 2, 2025 [8] - The ETF has a beta of 0.87 and a standard deviation of 17.11% over the trailing three-year period, indicating a medium risk profile [8] Investment Ranking - PPA holds a Zacks ETF Rank of 2 (Buy), based on expected asset class return, expense ratio, and momentum, making it a strong option for investors seeking exposure to the Industrials ETFs segment [10] Alternative Options - Other ETFs in the Aerospace & Defense space include SPDR S&P Aerospace & Defense ETF (XAR) with $3.97 billion in assets and iShares U.S. Aerospace & Defense ETF (ITA) with $9.32 billion in assets, both offering lower expense ratios compared to PPA [11]