MISLETF

Invesco Aerospace & Defense ETF (PPA) and First Trust Indxx Aerospace & Defense ETF (MISL) offer different approaches to defense sector investing. PPA, the larger and more established fund with $7.4B in AUM, delivers higher dividends (0.4% yield) and lower volatility with traditional aerospace exposure.

MISL, launched in 2022 with a more concentrated 39-holding portfolio, emphasizes next-gen defense tech including Palantir and SpaceX. Since 2022, PPA has outperformed with 117% total return (21.6% CAGR) versus MISL's 105% (19.8% CAGR), though both have slightly elevated expense ratios around 0.58-0.60%.

The First Trust Indxx Aerospace & Defense ETF (MISL) offers diversified exposure to the aerospace and defense sector with a 0.6% expense ratio and $771.54 million in assets. The ETF has declined 2.46% year-to-date and 3.32% over the past year, with top holdings including Palantir Technologies, RTX Corporation, and SpaceX. MISL received a Zacks ETF Rank of 2 (Buy), though larger competitors like ITA and PPA offer lower expense ratios.

Goldman Sachs upgraded Palantir Technologies to Buy with a $230 price target, citing potential for outperformance through 2027 driven by sovereign AI and verticalization strategy. Dan Ives also included Palantir in his top five tech picks for 2027, with a $250 price target, as the market underappreciates the $4 trillion AI spending boom. The stock has surged 58% since mid-2026.

Boeing won a $20 billion contract from the U.S. Navy to develop the sixth-generation F/A-XX Strike Fighter, beating Northrop Grumman. The company also secured a $2.38 billion contract for additional F-15EX aircraft and received major commercial orders from Turkish Airlines (150 737 MAX jets) and Korean Air (103 aircraft).

Faster aircraft certification could provide additional momentum. Analysts remain bullish with an average price target of $275.32, representing a 47.98% upside from the current price.