What Is the PPA ETF? A Complete Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
The Invesco Aerospace & Defense ETF (PPA) tracks the SPADE Defense Index, providing concentrated exposure to leading U.S. defense names such as Lockheed Martin, RTX, and Boeing. Comparing it with similar ETFs like ITA and XAR across expense ratio, dividends, and diversification is key to choosing the right vehicle.
SubscribeWhat Is the Invesco Aerospace & Defense ETF?
It is a sector ETF that tracks the SPADE Defense Index, providing concentrated exposure to U.S. aerospace and defense companies. It broadly includes major defense contractors such as Lockheed Martin, RTX, and Boeing, offering exposure across the full defense theme.
It is well suited for thematic investors looking to bet on the long-term growth of the defense and aerospace industry, as well as for those seeking to increase the defense-sector weighting in their portfolio.
The ETF is managed by Invesco on a passive (index-tracking) basis.
How to Invest in the Invesco Aerospace & Defense ETF
| Item | Details |
|---|---|
| Tracked Index | SPADE Defense Index |
| Management Style | Passive (Index Tracking) |
| Rebalancing Frequency | Quarterly |
| Dividend Schedule | Quarterly |
| Fund Manager | Invesco |
| Total Expense Ratio | 0.58% |
Constituents are selected and weighted based on their contribution to and importance within the U.S. defense and aerospace industry. A cap-weighting methodology includes major defense companies broadly while limiting excessive concentration in any single name. Notably, the index takes a broad view of defense, extending to technology companies in cybersecurity and information services.
- Broad defense definition that includes cybersecurity and information-technology companies
- Cap weighting reduces over-concentration in major defense names
Invesco Aerospace & Defense ETF Size and Cost (AUM & Expense Ratio)
Assets under management (AUM) stand at $7.3B, with a total expense ratio of 0.58% annually.
Compared with peer aerospace and defense funds such as ITA and XAR, differences in index methodology and constituent composition make it important to evaluate expense ratio and diversification together.
Invesco Aerospace & Defense ETF Performance and Flows
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe broader defense theme has attracted renewed attention amid expectations of higher defense spending and shifting policy conditions, while short-term performance remains sensitive to defense-budget policy and individual contract news.
Capital tends to rotate into defense themes when geopolitical risks rise, while flows can soften during peacetime periods or when budget-cut concerns intensify. Given its single-sector concentration, capital flows respond sensitively to theme-driven sentiment.
Invesco Aerospace & Defense ETF Strengths and Weaknesses
Broad, diversified exposure to the defense theme is a strength, while single-sector concentration and policy dependence are weaknesses.
💪 Key Strengths
⚠️ Points to Watch
Invesco Aerospace & Defense ETF Alternatives and Related Products
Direct substitutes within the same aerospace and defense theme include ITA and XAR, allowing comparison of index methodology and expense ratios. Investors seeking broader industrial exposure can also consider XLI, while those targeting a U.S. industrial-revival theme may look at AIRR. Reviewing the ETFs in the table alongside differences in expense ratio, diversification, and theme definition is recommended.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 XLI | State Street Industrial Select Sector SPDR ETF | $166.96 | +1.4% | $30.2B | 0.08% | 1.13% | +7.8% |
 ITA | iShares U.S. Aerospace & Defense ETF | $207.16 | +2.4% | $11.8B | 0.37% | 0.27% | -4.5% |
 AIRR | First Trust RBA American Industrial Renaissance ETF | $96.79 | +1.2% | $8.1B | 0.69% | 0.1% | -3.2% |
 XAR | State Street SPDR S&P Aerospace & Defense ETF | $223.46 | +2.6% | $4.9B | 0.35% | 0.19% | -10.6% |
 IYT | iShares U.S. Transportation ETF | $80.70 | +0.7% | $1.9B | 0.37% | 0.94% | +14.3% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| BA | Boeing Co | 0.16% | $188.31 | -0.0% | $148.8B | 85.8 | 0.02% |
| RTX | RTX Corp | 0.15% | $197.48 | +3.4% | $266.5B | 32.1 | 1.46% |
| GE | GE Aerospace | 0.15% | $288.43 | +1.0% | $298.0B | 33.3 | 0.63% |
| LMT | Lockheed Martin Corp | 0.13% | $635.20 | +5.1% | $146.6B | 22.6 | 2.2% |
| GD | General Dynamics Corp | 0.05% | $357.04 | +2.2% | $96.6B | 21.8 | 1.77% |
| NOC | Northrop Grumman Corp | 0.05% | $565.41 | +2.5% | $80.3B | 17.8 | 1.7% |
Investor Checklist for the Invesco Aerospace & Defense ETF
Key points to review before investing in PPA. Because defense-themed ETFs tend to carry heavy single-sector concentration and policy dependence, it is advisable to evaluate portfolio weighting, expense costs, and currency exposure in advance.
| Checkpoint | What to Verify | Current Status |
|---|---|---|
| 💵 Expense Ratio | Impact of cumulative cost over long-term holding | On the higher side |
| 🎯 Sector Concentration | Management of single-sector weighting | Concentrated exposure |
| 🏛️ Policy Variables | Effect of defense budgets and contracting policy | Needs review |
| 💱 Currency | Impact on KRW-denominated returns | No currency hedging |
Single-sector concentration and defense-policy dependence are the primary drivers of volatility. Short-term drawdowns can occur when defense-theme sentiment fades or budget-cut concerns intensify.
The fund is a suitable choice for investors seeking to take a thematic bet on the long-term growth of the defense and aerospace industry. For those wanting purer, narrower defense exposure, compare it with ITA and XAR, and for broader industrial exposure, consider XLI.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of June 21, 2026.
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