Invesco (PPA) vs Tema (NASA): Which Aerospace and Space ETF Is the Better Buy?
The Invesco Aerospace & Defense ETF (PPA 2.40%) offers a lower-cost, diversified play on traditional defense, while the Tema Space Innovators ETF (NASA 1.14%) targets high-growth orbital technology.
The choice between these two funds often comes down to whether an investor prefers the stability of established military defense or the potential of the commercial space frontier. While both funds operate in the aerospace category, their underlying strategies differ in maturity, cost structure, and technical focus, ranging from traditional homeland security to satellite launch systems.
Snapshot (cost & size)
| Metric | NASA | PPA |
|---|---|---|
| Issuer | Tema | Invesco |
| Expense ratio | 0.75% | 0.58% |
| Dividend yield | n/a | 0.37% |
| AUM | $2.6 billion | $8.4 billion |
Dividend yield is the trailing-12-month distribution yield.
The Invesco Aerospace & Defense ETF is the more cost-effective choice, with an expense ratio of 0.58%. This is notably lower than the 0.75% charged by the Tema Space Innovators ETF, which represents a more expensive entry point for its specialized space-related strategy.
Performance & risk comparison
| Metric | NASA | PPA |
|---|---|---|
| Max drawdown (5 yr) | n/a | (18.40%) |
What’s inside
The Invesco Aerospace & Defense ETF tracks the SPADE Defense Index and identifies companies involved in U.S. defense, homeland security, and aerospace operations. Launched in 2005, the fund rebalances quarterly and holds 61 stocks, with 91.00% in industrials and 9.00% in technology. Its largest positions include Boeing Co. at 8.40%, GE Aerospace at 8.34%, and RTX at 6.84%. Over the trailing 12 months, it has paid $0.66 per share in dividends. Management employs a strategy that prioritizes consistent performance, earning high risk-adjusted ratings from third-party services.
The Tema Space Innovators ETF, which launched in 2026, targets companies involved in the expanding space economy. Its strategy focuses on businesses deriving significant revenue from satellite communications, launch systems, and propulsion technologies. This fund invests across various market capitalizations and geographies, and its largest positions include Rocket Lab (9.79%), MDA Space (6.54%), and AST SpaceMobile (6.49%).
For more guidance on ETF investing, check out the full guide at this link.
Which ETF is the better buy?
There are aspects of each of these ETFs that might make them attractive to the right investors. For investors seeking stability and broader diversification, the Invesco Aerospace & Defense ETF (PPA) is probably the better bet for you. It has a slightly lower expense ratio, owns twice as many stocks, holds more mature companies with a broader aerospace focus, pays a small dividend, and maintains a five-year beta of 0.87, implying that it is generally less volatile than the market as a whole. Since the ETF launched in 2005, it has compounded total returns of 13.6% annually, demonstrating that, despite its steady nature, it also offers the potential for outperformance.
Meanwhile, the Tema Space Innovators ETF (NASA) is the plucky young upstart that just debuted in April 2026 and has already risen nearly 20%. NASA is best left for risk-tolerant investors looking to focus more on the “space” niche of the aerospace industry. NASA will likely prove incredibly volatile as the nascent space industry gains a foothold in the global economy. Owning mostly high-growth, unprofitable stocks, the new ETF is truly a “swing-for-the-fences” investment, focused on a space market that is incredibly hot right now. Investors shouldn’t go “all-in” at this moment; rather, they should buy in small batches over time.
Personally, I would rather own PPA as its long track record of impressive total returns speaks for itself, despite being viewed as a “steady-Eddie” option. Furthermore, PPA does have a 3% position in Rocket Lab, so it’s not completely ignoring the space portion of the aerospace industry — rather, just making smaller-sized bets on it.
