iShares U.S. Aerospace & Defense ETF (NYSEMKT:ITA) provides a lower-cost entry to the sector, while First Trust Indxx Aerospace & Defense ETF (NYSEMKT:MISL) offers a unique tilt by including defense-related technology firms.
Investors seeking exposure to the aviation and defense industries often look to specialized ETFs to capture sector-specific growth. Aerospace and defense ETFs offer exposure to national security budgets and commercial aviation cycles. This analysis compares two popular options that differ in scale, cost, and historical performance.
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares fund is the more affordable option with an expense ratio of 0.38% compared to the 0.60% charged by the First Trust fund. The iShares fund also provides a higher payout, with a 0.50% yield.
The iShares U.S. Aerospace & Defense ETF (NYSEMKT:ITA) aims to replicate the investment performance of a specific market index composed of U.S.-based companies in the aviation and defense industries. Its largest positions include GE Aerospace (NYSE:GE) at 22.37%, RTX (NYSE:RTX) at 15.69%, and The Boeing Company (NYSE:BA) at 9.20%. It holds 49 stocks and is concentrated entirely in the industrials sector. iShares U.S. Aerospace & Defense ETF has paid $1.06 per share over the trailing 12 months, which on its recent ~$230.89 share price works out to a 0.50% yield. The fund was launched in 2006.
The First Trust Indxx Aerospace & Defense ETF (NYSEMKT:MISL) aims to mirror the Indxx US Aerospace & Defense Index by allocating at least 80% of its assets to the benchmark components. Its top holdings include GE Aerospace at 8.85%, Palantir Technologies (NASDAQ:PLTR) at 8.28%, and The Boeing Company at 7.77%. It holds 49 securities across industrials (80%) and technology (13%). First Trust Indxx Aerospace & Defense ETF has paid $0.14 per share over the trailing 12 months, which on its recent ~$42.72 share price works out to a 0.30% yield. It was launched in 2022.
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