As humans attempt to become a multi-planetary species in the coming decades, there will undoubtedly be an increase in interest surrounding Aerospace companies. It is important to recognize, though, that the Aerospace sector is about more than just space travel; it involves global communications, transportation, defense efforts, and more. This means that not only will the sector be an intriguing investment in the years to come, but it already is.
With that in mind, we have listed 5 of the top Aerospace-focused ETFs built to provide investors with exposure to companies that excel in these areas.
AeroSpace Focused Exchange Traded Funds (ETFs)
*Note: Metrics are provided in USD and were accurate at the time of writing.*
1. ARK Space Exploration & Innovation ETF
The ARK Space Exploration & Innovation ETF (ARKX) is designed to provide exposure to companies involved in space exploration and innovation. It seeks to capture the growth and advancements in space-related technologies, including those focused on orbital and sub-orbital aerospace, enabling technologies, and space-related businesses. The fund aims to achieve long-term capital appreciation by investing in companies at the forefront of space exploration and technological innovation.
Key holdings of this fund include the following companies,
- Kratos Defense & Security (KTOS)
- Iridium Communications Inc. (IRDM)
- Aerovironment Inc. (AVAV)
- Teradyne Inc. (TER)
- Trimble Inc. (TRMB)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$231 million | 0.75% | -1.67% | -10.71% | N/A |
ARKX is managed by ARK Invest, which is known for its focus on disruptive innovation and thematic investing. The fund targets a diverse range of companies, ensuring broad exposure to the space sector and related industries.
What sets it apart from direct competitors?
- Focus on Innovation: ARKX invests in companies that are driving technological advancements in space exploration and related fields.
- Active Management: The fund is actively managed, allowing it to dynamically adjust holdings based on the latest industry trends and innovations.
- Broad Industry Coverage: It includes companies from various segments of the space industry, providing comprehensive exposure to the sector’s growth potential.
ARKX was launched in March 2021 and has quickly gained attention for its focus on the emerging space industry and its innovative investment approach.
2. iShares U.S. Aerospace & Defense ETF (ITA)
The iShares U.S. Aerospace & Defense ETF (ITA) is designed to provide exposure to U.S. companies involved in the aerospace and defense industries. It seeks to track the performance of the Dow Jones U.S. Select Aerospace & Defense Index, which includes companies engaged in the development, manufacturing, and support of aerospace and defense systems.
Key holdings of this fund include the following companies,
- GE Aerospace (GE)
- RTX Corp. (RTX)
- Boeing (BA)
- Lockheed Martin Corp. (LMT)
- L3Harris Technoogies Inc. (LHX)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$6.34 billion | 0.40% | 14.23% | 7.42% | 5.43% |
ITA is managed by iShares, a BlackRock brand known for its extensive range of ETFs and commitment to providing diversified, low-cost investment options. The fund targets a wide range of U.S. aerospace and defense companies, ensuring comprehensive market exposure.
What sets it apart from direct competitors?
- Sector-Specific Exposure: ITA provides targeted exposure to the aerospace and defense sectors, benefiting from industry-specific growth drivers.
- Established Companies: The fund includes well-established companies with strong market positions and significant defense contracts.
- Dividend Yield: ITA offers a competitive dividend yield, providing income in addition to capital appreciation.
ITA was launched in May 2006 and has been a popular choice for investors looking to gain exposure to the aerospace and defense industries.
3. SPDR S&P Aerospace & Defense ETF
The SPDR S&P Aerospace & Defense ETF (XAR) is designed to provide exposure to U.S. companies in the aerospace and defense sectors. It seeks to track the S&P Aerospace & Defense Select Industry Index, offering a diversified investment in large—and small-cap companies within these industries.
Key holdings of this fund include the following companies,
- Spirit Aerosystems Holdings Inc. (SPR)
- Lockheed Martin Corp. (LMT)
- BWX Technologies Inc. (BWXT)
- Huntington Ingalls Industries (HII)
- L3Harris Technologies Inc. (LHX)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$2.17 billion | 0.35% | 15.85% | 2.43% | 6.86% |
State Street Global Advisors manages XAR, which offers investors a broad range of exposure to aerospace and defense companies across different market capitalizations.
What sets it apart from direct competitors?
- Equal-Weighting: XAR utilizes an equal-weighting approach, which reduces concentration risk and provides balanced exposure to all holdings.
- Diverse Holdings: The fund includes a mix of large and small-cap companies, offering a broader representation of the aerospace and defense sectors.
- Competitive Expense Ratio: XAR offers a relatively low expense ratio, making it a cost-effective option for investors.
XAR was launched in September 2011 and is known for its balanced exposure to the aerospace and defense sectors.
4. Invesco Aerospace & Defense ETF
The Invesco Aerospace & Defense ETF (PPA) is designed to provide exposure to companies involved in the aerospace and defense industries. It tracks the SPADE Defense Index, which consists of companies engaged in the development, manufacturing, operations, and support of defense, homeland security, and aerospace operations.
Key holdings of this fund include the following companies,
- Lockheed Martin Corp. (LMT)
- Boeing Co/The (BA)
- GE Electric Co. (GE)
- RTX Corp. (RTX)
- Northrop Grumman Corp. (NOC)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$ billion | 0.58% | 14.47% | 9.48% | 6.44% |
PPA is managed by Invesco and provides targeted exposure to companies that are at the forefront of aerospace and defense innovation and production.
What sets it apart from direct competitors?
- Focused Index: PPA tracks the SPADE Defense Index, specifically designed to capture the performance of aerospace and defense companies.
- Growth Potential: The fund includes companies with significant growth potential driven by defense spending and technological advancements.
- Established Players: PPA features well-established companies with a strong track record in the aerospace and defense sectors.
PPA was launched in October 2005 and has been a popular choice for investors seeking exposure to the aerospace and defense industries.
5. Procure Space ETF (UFO)
The Procure Space ETF (UFO) is designed to provide exposure to companies involved in space-related businesses. It tracks the S-Network Space Index, which includes companies engaged in satellite-based telecommunications, rocket and satellite manufacturing, space infrastructure, and hardware.
Key holdings of this fund include the following companies,
- Sirius XM Holdings Inc. (SIRI)
- AST SpaceMobile Inc. (ASTS)
- Viasat Inc. (VSAT)
- Rocket Lab USA Inc. (RKLB)
- Globalstar Inc. (GSAT)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$31.29 million | 0.75% | -15.74% | -7.47% | N/A |
UFO is managed by ProcureAM and focuses on the burgeoning space industry. It provides investors with exposure to companies that are leading the way in space exploration and technology.
What sets it apart from direct competitors?
- Pure-Play Space Exposure: UFO provides targeted exposure to companies that derive a significant portion of their revenues from space-related activities.
- Innovative Focus: The fund includes companies at the cutting edge of space technology and exploration.
- Diverse Holdings: UFO encompasses a variety of companies, from satellite operators to rocket manufacturers, ensuring broad industry coverage.
UFO was launched in April 2019 and is unique in its pure-play focus on the space industry, offering investors a specialized investment option in this exciting sector.
Final Thoughts on Aerospace ETFs
Critical to defense, communications, transportation, and exploration, the Aerospace sector is one that is set to continue growing over the coming decades. Investors who recognize this will do well to consider the ETFs listed above, which can provide efficient and easy exposure to some of the top companies innovating in the space.
Make sure to visit our look at the top online brokers that can help you invest and gain exposure to what may be lucrative opportunities.
