PPA vs XAR

PPABInvesco Aerospace & Defense ETF

XARAState Street SPDR S&P Aerospace & Defense ETF

In short

PPA The original defense ETF. PPA has tracked the SPADE Defense Index since 2005, and its net runs wider than jet engines: homeland security and government space work count too.

XAR Most defense funds hand the wheel to a handful of giant primes. XAR spreads its roughly 50 aerospace and defense names close to equal weight, so a mid cap parts maker carries about the same load as a household-name contractor.

Stated mandate

PPA The Fund seeks exposure to companies involved in US defense, homeland security, and aerospace. It tracks the SPADE Defense Index and normally invests at least 90% of assets in its common stocks.

XAR The fund seeks to track, before fees and expenses, the total return performance of the S&P Aerospace & Defense Select Industry Index.

Why people hold it

• PPA Launched in October 2005, PPA is the elder statesman of US defense funds, with a track record spanning two decades of shifting Pentagon budgets.invesco.com
• The index reaches past the big primes into homeland security and government space operations, so roughly 60 holdings cover the plumbing of national security, not just airframes.invesco.com
• Weighting is modified market cap, not raw market cap, which trims how much the largest contractors can pull the fund around.invesco.comspadeindex.com
• A multi-billion-dollar fund that pays quarterly and rates as one of the stronger builds in a crowded defense-theme group.

• XAR Modified equal weighting keeps any single prime contractor from running the show: large, mid and small cap names carry similar weight in the index.ssga.com
• Costs 0.35% a year, under the 0.50% typical of defense funds and a hair below ITA at 0.37%. Cheap for a targeted industry bet.
• Trading since 2011 and now a multi-billion-dollar fund, it is one of the most established and best-built ways to own the US aerospace and defense industry.
• About 50 US-listed aerospace and defense stocks pulled from the S&P Total Market Index, so suppliers and smaller specialists sit alongside the famous names.ssga.com

Worth knowing

• PPA At 0.58% a year, PPA sits above the defense-cohort median of 0.50%, and above XAR (0.35%) and ITA (0.37%).
• It is a non-diversified, single-industry fund, so government budget priorities and contract news move it more than the broad market does.invesco.com
• The index provider decides which companies are systematically important to US defense, so the lineup rests partly on judgment, reviewed on a set schedule.spadeindex.com

• XAR One industry, tied to government budgets and order cycles. Expect bigger swings than a broad market fund.
• Equal weighting leans on smaller suppliers, which cuts both ways: less of the fund rides the megacap primes when those lead.ssga.com
• Distributions land quarterly, but this is an industry growth basket, not an income vehicle.

Full PPA profile⁠

Full XAR profile⁠