iShares U.S. Aerospace & Defense ETF
BlackRock / iShares — tracks the Dow Jones U.S. Select Aerospace & Defense Index
The blue-chip aerospace & defense benchmark — large-cap primes and engine/component suppliers. Market-cap-tilted, so it's top-heavy in GE Aerospace and RTX. The institutional default for the defense trade, not a pure space play.
- Concentrated — Top disclosed positions are 50%+ of the disclosed book.
Top holdings
Dominant single holding — engines
Defense prime / aerospace
Commercial + defense aircraft
Aerospace components
Defense prime
Only meaningful 'new space' name in the top 10
Recent moves
Held its blue-chip defense composition through the 2026 rearmament cycle; GE Aerospace's outperformance dominates the fund given its ~23% weight, with only a small Rocket Lab sleeve touching new space.
Our take
The conservative, liquid way to own aerospace & defense — but it's a defense-primes fund first, with only a sliver of true space. Pair it with UFO/ROKT if the thesis is space specifically rather than the broader rearmament cycle.
The teaching point most buyers miss: ITA is filed under 'defense,' but its record is roughly half a commercial-aerospace story.
GE Aerospace (~22%), Boeing (~9%), Howmet (~4.8%) and TransDigm (~4.4%) are levered to airline fleet growth and engine aftermarket, not the NDAA. The multi-year run — ~28.5%/yr over 3yr — rode BOTH the post-COVID travel recovery (aftermarket margins, GE's re-rating) and the 2022-26 rearmament cycle (Ukraine, European budget hikes, RTX/LMT/NOC/GD). Because it's cap-weighted, GE's outperformance at a 22% weight did outsized lifting — you underwrite GE and RTX far more than 'defense' broadly. That concentration is the double edge: it powered the record and is the single largest risk. At 0.38% it is cheaper and far more liquid than thematic space funds and is the institutional default — but a buyer wanting diversified A&D supply-chain breadth gets a top-heavy prime book, and a buyer wanting pure defense-budget exposure is quietly long the commercial air-travel cycle.
Thesis
ITA is the blue-chip aerospace & defense benchmark: cap-weighted Dow Jones U.S. Select A&D index, 53 names, 0.38% fee, ~$13.6B. The strategy's logic is to own the large-cap primes and top suppliers and let market cap concentrate you into the leaders. That works when a few megacaps lead — but it means GE Aerospace (~22%) and RTX (~16%) ARE the fund, and GE's driver is the commercial-engine aftermarket, not defense budgets. The 'defense' label understates how much of ITA is a commercial-aerospace cycle bet.
Passive cap-weighted tracking of the Dow Jones U.S. Select Aerospace & Defense Index — no factor tilt, no equal-weight cap. Concentration is the design: top 2 ~38%, top 3 (incl. Boeing) ~47%, top 10 ~77% of 53 holdings. GE Aerospace's ~22% weight makes single-name performance the dominant return driver rather than the breadth of the A&D complex.
Assessment
- Lowest-friction way to own the A&D complex: 0.38% fee, ~$13.6B AUM, deep liquidity — the institutional default vs ~0.75% thematic space funds.
- Cap-weighting auto-concentrated into the cycle's winner (GE Aerospace), so it captured the megacap-led re-rating in full.
- Blue-chip book (GE, RTX, BA, LMT, NOC, GD, LHX) — quality primes with multi-year backlogs and aftermarket annuity revenue.
- One ticker catches both the defense-budget and the commercial-aftermarket tailwind.
- Extreme top-heaviness: GE ~22% + RTX ~16% = ~38%; top 10 = ~77% of a 53-name fund — a 2-3 stock bet dressed as a sector fund.
- Mislabeled exposure: ~40% is commercial aerospace (GE engines, BA, HWM, TDG aftermarket), so a travel / airline-capex downturn hits ITA even with strong defense budgets.
- GE Aerospace single-name risk dominates — the record is inseparable from one stock's re-rating; a GE stumble drags the whole book.
- Boeing (~9%) carries idiosyncratic program / production / quality risk uncorrelated to the defense thesis.
- After ~28.5%/yr for three years, much of the rearmament + recovery re-rate is already priced.
Record
Verified trailing returns (as of mid-Jul 2026): 1yr +17.5%, 3yr ~+28.5%/yr, 5yr ~+18%/yr, 10yr ~+15%/yr, since-2006-inception ~+12.6%/yr; YTD ~+10%. Attribution matters more than the headline: the standout 3-year number was driven disproportionately by GE Aerospace at a ~22% weight re-rating on commercial-engine aftermarket strength, layered on the 2022-26 rearmament cycle lifting RTX/LMT/NOC/GD. So the record reflects two distinct tailwinds — commercial-air recovery and defense-budget growth — not one clean 'defense' trade. The cap-weighted structure amplified the megacap leaders; an equal-weight peer (XAR) would have taken a materially different path, tilting to mid-caps and space names. YTD (~+10%) and the 1yr (+17.5%) cooled from the torrid 3yr pace as the easy re-rating rolled off.
- 2026-07Trailing returns to 31 Jul 2026: 1-year +21.3% (StockAnalysis) to +22.5% (totalrealreturns), YTD +11.78% total return. The mid-July reading understated the year by roughly 4-5pp.
- 2026-07The trailing year reaccelerated rather than cooled, and held above 21% straight through July 2026 — a month when SOX fell 20.6% and this fund only 1.1%. The re-rating had not rolled off.
Risks & fit
- Concentration: a de-rating in GE or RTX alone can sink the fund regardless of the sector.
- Defense-budget cycle: a US / European spending plateau or a CR / shutdown removes a core catalyst.
- Commercial-aero cyclicality: an airline-capex / travel downturn hits GE/BA/HWM/TDG — the hidden ~40% beta.
- Boeing program / production / quality shocks (~9% weight).
- Valuation compression after a multi-year run — much good news is priced.
The thesis that ITA is the efficient way to own the A&D cycle breaks if (a) defense budgets plateau while commercial-aero demand simultaneously rolls over, so both tailwinds fade at once; or (b) GE Aerospace de-rates — given its ~22% weight, ITA can underperform the broader defense complex even in a strong-budget year. Concretely: a year where global defense spend keeps rising but ITA lags an equal-weight peer (XAR) would confirm you were paid for GE's beta, not for 'defense.' Conversely, if defense names ex-GE lead and ITA still keeps pace, the cap-weight concentration bet is validated.
Suits an investor who wants low-cost, highly liquid, blue-chip large-cap aerospace & defense exposure in one ticker and is comfortable that ~38% sits in two names (GE, RTX) and ~40% tracks the commercial-air cycle. Less suitable for someone seeking diversified A&D supply-chain breadth (XAR equal-weights that), a pure defense-budget play (ITA is roughly half commercial aero), or pure space exposure (only a ~3% Rocket Lab sleeve). Not a trading vehicle.
0.38% expense ratio — mid-tier for a single-industry ETF: well below thematic space funds (~0.75%) but far above broad sector SPDRs (~0.09%). For a book you could crudely replicate with 5-6 stocks, the fee buys liquidity, index rebalancing, and the wrapper.