Designed to provide broad exposure to the Industrials - Aerospace & Defense segment of the equity market, the Invesco Aerospace & Defense ETF (PPA) is a passively managed exchange traded fund launched on October 26, 2005.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $8.11 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. PPA seeks to match the performance of the SPADE Defense Index before fees and expenses.
The SPADE Defense Index is comprised of approximately 50 U.S. companies whose shares are listed on a U.S. Exchange. These are companies that are principally engaged in the research, development, manufacture, operation and support of defense, military, homeland security and space operations.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.58%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.37%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector -- about 92.8% of the portfolio.
Looking at individual holdings, General Electric Co (GE) accounts for about 8.62% of total assets, followed by Boeing Co/the (BA) and Rtx Corp (RTX).The top 10 holdings account for about 54.97% of total assets under management.
Performance and Risk
The ETF return is roughly 9.74% so far this year and is up roughly 18.7% in the last one year (as of 07/15/2026). In that past 52-week period, it has traded between $144.02 and $185.59.
The ETF has a beta of 0.73 and standard deviation of 17.96% for the trailing three-year period, making it a medium risk choice in the space. With about 63 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Aerospace & Defense ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PPA is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Global X Defense Tech ETF (SHLD) tracks GLOBAL X DEFENSE TECH INDEX and the iShares U.S. Aerospace & Defense ETF (ITA) tracks Dow Jones U.S. Select Aerospace & Defense Index. Global X Defense Tech ETF has $6.80 billion in assets, iShares U.S. Aerospace & Defense ETF has $14.05 billion. SHLD has an expense ratio of 0.5%, and ITA charges 0.38%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco Aerospace & Defense ETF (PPA): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).