Invesco Aerospace & Defense ETF
Invesco — tracks the SPADE Defense Index
Aerospace, defense, homeland security AND space operations — slightly more even weighting across the primes than ITA's GE-heavy book, plus broader homeland-security/space exposure. Companion benchmark to ITA.
Top holdings
Defense prime — top weight (vs ITA where GE dominates)
Defense prime / aerospace
Commercial + defense aircraft
Engines
Defense prime / space systems
Defense prime
Recent moves
Captured the 2026 defense-spending tailwind through a balanced book of primes (Lockheed/RTX/Boeing) plus homeland-security and space-operations names; no dramatic repositioning — its edge is breadth.
Our take
Functionally ITA's twin with a more even prime weighting and explicit homeland-security/space tilt — slightly higher fee (0.58%). Choose PPA over ITA to avoid GE concentration; neither is a space-pure play.
The stored 'ITA's twin' framing is the thing to interrogate.
The genuine, non-obvious distinction is dual-cycle exposure: SPADE's top ranks put RTX (7.6%), GE Aerospace (7.1%) and Boeing (7.1%) above Lockheed (6.0%), and add Howmet, Honeywell and Parker-Hannifin — names whose earnings hinge on commercial jet build-rates and spares, not Pentagon procurement. So a buyer who thinks they own 'defense' actually owns a defense-plus-commercial-aero blend; that helped in 2026's twin tailwinds but means a Boeing stumble or an air-travel slowdown hits the fund independently of the defense thesis. The record is passive index beta, not manager skill. Its 'breadth = safety' edge over ITA is real but marginal — both are ~100% US primes and highly correlated. XAR (equal-weight) is the sharper structural alternative; SHLD adds the defense-tech / international angle PPA lacks.
Thesis
PPA is a passive, cap-weighted bet on the US aerospace-and-defense complex via the SPADE Defense Index — but the 'defense' label undersells it. Roughly half the book is commercial-aerospace and industrials (Boeing, GE Aerospace, Howmet, Honeywell, Parker-Hannifin), so it rides two distinct cycles at once: the post-2022 rearmament supercycle AND the commercial-aviation / aftermarket recovery. It is a sector-beta vehicle, not a pure defense-budget play.
Tracks the SPADE Defense Index — ~64 US-listed names across defense, military, homeland security and space, market-cap-weighted but effectively soft-capped (no name above ~7.6%; top 10 = 53.6% of assets). The construction spreads weight across the primes plus commercial-aero and mid-caps, versus ITA's more top-heavy book, at a 0.58% fee.
- 2026-07Holdings at Jul 31 2026: the top ten is 54.85% and RTX has risen to 8.35%, so the ~7.6% single-name ceiling no longer holds. The book is modestly more concentrated than a balanced-spread reading implies.
Assessment
- Balanced prime weighting — no single name above ~7.6%, lower idiosyncratic risk than a GE- or LMT-heavy book
- Dual exposure to both defense budgets and the commercial-aero/aftermarket recovery cycle via BA, GE, HWM, HON
- Deep 2005-inception track record and ~$8B AUM — liquid, established, survived multiple budget cycles
- Explicit homeland-security and space sleeve broadens beyond the pure combat primes
- 'Defense' branding masks heavy commercial-aerospace and industrials exposure most buyers don't price in
- 0.58% fee is the priciest of the mainstream A&D trio (ITA/XAR are cheaper) for a passive index product
- Still ~100% US large-cap primes — misses European rearmament names and next-gen defense-tech
- Highly correlated with ITA, so the 'more balanced than ITA' edge delivers only a thin differentiation
- Cap-weighting concentrates in mature primes and structurally underweights the faster-growing small/mid-cap disruptors XAR captures
Record
Verified (stockanalysis, ~Jul 20 2026): 1-year total return +14.99%, since-inception 13.42% annualized; 0.38% yield. Longer trailing figures (as of Apr 2026) ~30.5% 3-yr and ~19.6% 5-yr annualized — strong, but that is sector beta from the 2022-2026 rearmament supercycle (Ukraine, NATO spending step-up, rising US defense budgets) stacked on Boeing's recovery and record commercial-aftermarket demand, not stock selection. Attribution matters: on 3-yr and 10-yr windows the equal-weight XAR (~32.7% and ~17.7% CAGR) out-ran PPA, while PPA edged the more concentrated ITA — evidence that cap-weighting into mature primes left return on the table versus a small/mid-cap tilt. The +15% trailing year is a marked cool-down from the explosive prior leg.
- 2026-07At Jul 31 2026 the trailing year is +19.13% total return (stockanalysis; TradingView +19.00%), since inception 13.61% annualised, yield 0.37%. The step up from ~+15% is the base month rolling off.
Risks & fit
- Defense-budget/political risk — continuing resolutions, budget caps, or efficiency-driven procurement cuts compress the primes
- Boeing-specific risk (~7%) — production/quality problems, strikes or order slowdowns hit the fund independent of defense
- Valuation re-rating after a multi-year run; the sector trades at elevated multiples into decelerating growth
- Commercial-aero cyclicality — an airline capex or travel downturn drags the GE/HWM/HON sleeve
- Single-country US concentration leaves European rearmament and pure defense-tech upside on the table
The two load-bearing claims are (1) PPA is meaningfully differentiated from ITA and (2) its balanced book is a lower-risk way to own the theme. Both fail if, over a full cycle including a drawdown, PPA's return and max-drawdown track ITA within ~1-2 pts/yr — proving the 'even weighting' edge is cosmetic. The dual-cycle thesis is falsified if the commercial-aero holdings (BA/GE/HWM) move in lockstep with the defense primes rather than adding an independent return stream — i.e. the sector is one correlated trade and 'half commercial' carries no diversification.
Someone wanting broad, one-ticker US aerospace-and-defense exposure who prefers a balanced spread across primes over single-name concentration, and who understands they are also buying a large commercial-aerospace position. It suits a thesis on sustained defense spending plus a commercial-aviation upcycle. It is a concentrated single-sector, single-country sleeve — not a diversified core — and peers (XAR, SHLD, cheaper ITA) may express the same view more sharply or cheaply.
0.58% expense ratio (verified) — the most expensive of the mainstream US A&D ETFs; iShares ITA and SPDR XAR both run materially cheaper. PPA charges a premium for its broader SPADE-index book versus more concentrated (ITA) or equal-weight (XAR) rivals.