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Using Recession Proof ETFs to Invest in the Aerospace and Defense Industry

If you believe there are investment opportunities in the aerospace and defense sectors, instead of looking at individual stocks, consider investing in defense and aerospace sector ETFs. Such vehicles offer a widely diverse exposure to these companies, where none of the heavy research burdens falls on your shoulders and some sort of protection from recession. What's more: ETFs let you cut down on pesky brokerage fees—ultimately saving you money by reducing your commission bill. Finally, many ETFs come with tax benefits.

So if you are ready to take the aerospace and defense sectors ETF plunge, here are some vehicles worth considering:

ITA - iShares Dow Jones U.S. Aerospace & Defense ETF

This ETF tracks the Dow Jones U.S. Select Aerospace & Defense Index. Its 33 holdings include stocks like United Technologies Corporation (UTX), Boeing (BA), Goodrich Corporation (GR) and Lockheed Martin (LMT). The sector breakdown of defense and aerospace stocks is about 59% aerospace securities and 41% defense securities. For more information, you can check out the ITA fact sheet on the iShares website.

PPA - Invesco Aerospace & Defense ETF

This ETF tracks the SPADE Defense Index, and of its 51 holdings, some of the top securities are Honeywell International (HON), United Technologies Corporation (UTX), Lockheed Martin (LMT) and Raytheon Corporation (RTN). The sector breakdown in this fund is 80% Industrials, 16% IT Companies, and 4% Materials. For more information, you can check out the PPA fact sheet on the Invesco website.

XAR - SPDR S&P Aerospace & Defense ETF

This SPDR ETF tracks the S&P Aerospace & Defense Select Industry Index (SPSIAD), and of its 37 holdings, some of the top stocks are Goodrich Corporation (GR), Spirit AeroSystems, Triumph Group Incorporated, and Honeywell International (HON). The sector breakdown for this fund is 97% aerospace and defense and 3% industrial machinery. For more information, you can check out the XAR fact sheet on the SSGA website.

DFND - Reality Shares DIVCON Dividend Defender ETF

There are currently just five ETF targeting the aerospace and defense sector, which should make it simple for investors to thoroughly investigate each one, to determine which ones make the most sense. Naturally, as with any investments, these ETF offerings contain risk, with no guaranteed returns on investment.

* The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by De Angelis & Associates or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity.

Credit: The Wall Street Journal, CyberHub

© De Angelis & Associates 2020. All Rights Reserved.


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