Designed to provide broad exposure to the Industrials - Aerospace & Defense segment of the equity market, the iShares U.S. Aerospace & Defense ETF (ITA) is a passively managed exchange traded fund launched on 05/01/2006.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $6.17 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. ITA seeks to match the performance of the Dow Jones U.S. Select Aerospace & Defense Index before fees and expenses.
The Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.85%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 99.80% of the portfolio.
Looking at individual holdings, Ge Aerospace (GE) accounts for about 17.81% of total assets, followed by Rtx Corp (RTX) and Lockheed Martin Corp (LMT).
The top 10 holdings account for about 75.16% of total assets under management.
Performance and Risk
So far this year, ITA has added about 0%, and is up roughly 15.78% in the last one year (as of 01/02/2025). During this past 52-week period, the fund has traded between $119.30 and $157.31.
The ETF has a beta of 1.01 and standard deviation of 18.40% for the trailing three-year period, making it a medium risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Aerospace & Defense ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ITA is a great option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&P Aerospace & Defense ETF (XAR) tracks S&P Aerospace & Defense Select Industry Index and the Invesco Aerospace & Defense ETF (PPA) tracks SPADE Defense Index. SPDR S&P Aerospace & Defense ETF has $2.64 billion in assets, Invesco Aerospace & Defense ETF has $4.70 billion. XAR has an expense ratio of 0.35% and PPA charges 0.57%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
iShares U.S. Aerospace & Defense ETF (ITA): ETF Research Reports
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
GE Aerospace (GE) : Free Stock Analysis Report
Invesco Aerospace & Defense ETF (PPA): ETF Research Reports
SPDR S&P Aerospace & Defense ETF (XAR): ETF Research Reports
RTX Corporation (RTX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
