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

Core Viewpoint - The State Street SPDR S&P Aerospace & Defense ETF (XAR) offers 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 - XAR is a passively managed ETF launched on September 28, 2011, with assets exceeding $4.4 billion, making it one of the larger ETFs in its sector [3]. - The fund aims to match the performance of the S&P Aerospace & Defense Select Industry Index, which is part of the S&P Total Stock Market Index [4]. Cost Structure - The ETF has an annual operating expense ratio of 0.35%, positioning it as one of the least expensive options in the market, with a 12-month trailing dividend yield of 0.62% [5]. Sector Exposure and Holdings - XAR provides 100% exposure to the Industrials sector, with the top three holdings being Ati Inc (4.32%), Woodward Inc, and Carpenter Technology [6]. - The top 10 holdings constitute approximately 38.14% of total assets under management [7]. Performance Metrics - The ETF has increased by about 38.57% year-to-date and 35.75% over the past year, trading between $144.94 and $251.24 in the last 52 weeks [8]. - It has a beta of 1.03 and a standard deviation of 20.18% over the trailing three-year period, indicating medium risk with more concentrated exposure than peers [8]. Alternatives - Other ETFs in the Aerospace & Defense space include Invesco Aerospace & Defense ETF (PPA) with $6.53 billion in assets and iShares U.S. Aerospace & Defense ETF (ITA) with $12.08 billion in assets, with expense ratios of 0.58% and 0.38% respectively [11].