PPAETF

The Select STOXX Europe Aerospace & Defense ETF (EUAD) received a Zacks ETF Rank of 4 (Sell) and is not recommended for investors seeking aerospace and defense exposure. The ETF has underperformed with a 2.9% loss year-to-date and 7.92% decline over the past year. With concentrated holdings and a 0.5% expense ratio, better alternatives like Invesco Aerospace & Defense ETF (PPA) and iShares U.S. Aerospace & Defense ETF (ITA) are suggested.

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 State Street SPDR S&P Aerospace & Defense ETF (XAR) is analyzed as a smart beta ETF with $5.52 billion in assets and a low expense ratio of 0.35%. However, the fund has underperformed recently, declining 5.84% year-to-date and 8.96% over the past year as of October 9, 2026.

With a beta of 1.03 and standard deviation of 23.92%, it presents medium risk. Alternative aerospace & defense ETFs like Invesco's PPA and iShares' ITA are also discussed.