Defense Stocks Are Surging and This ETF Lets You Collect Dividends From the Global Arms Race

Core Insights - Defense stocks have shown significant performance, with the iShares U.S. Aerospace & Defense ETF (ITA) increasing by 52.34% over the past year and 7.87% year-to-date as of March 18, driven by rising global defense budgets due to geopolitical pressures [2][6] Distribution Overview - ITA has a distribution yield of 0.33%, with the most recent distribution being $0.1513 per share, and total distributions projected at $1.33 per share for 2025, up from $1.23 in 2024 and $1.17 in 2023 [4][6] - The fund has a net expense ratio of 0.38% and an assets under management (AUM) of $16 billion, indicating a solid financial structure [4] - The ETF is primarily a growth vehicle, with defense companies reinvesting heavily in R&D and production, leading to compressed dividend yields across the sector [4][6] Performance and Resilience - Major holdings in ITA, such as GE Aerospace, RTX Corp, Boeing, and Lockheed Martin, have seen returns between 40% and 57% over the past year, supported by expanding military order backlogs and rising defense budgets [6] - ITA has maintained consistent quarterly distributions even during the COVID-19 crisis, showcasing resilience over 20 years of payouts [6]