Which Aerospace ETF Is Best for Your Portfolio in 2026?
Investors looking for lower costs and a more concentrated bet on major defense contractors may favor iShares U.S. Aerospace & Defense ETF (NYSEMKT:ITA), while Invesco Aerospace & Defense ETF (NYSEMKT:PPA) offers a slightly broader industrials mix.
These two exchange-traded funds serve as primary gateways for investors seeking to capitalize on the U.S. aerospace and defense sectors. While both track companies that build fighter jets, satellites, and naval vessels, they differ in how they weight their portfolios and the costs they charge for that exposure.
Snapshot (cost & size)
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares ETF is more affordable for long-term holders, carrying an expense ratio of 0.38% compared to 0.58% for the Invesco fund. The ETFs offer similar trailing-12-month dividend yields.
Performance & risk comparison
The iShares ETF focuses on 49 holdings, making it a relatively concentrated option for those who want exposure to the biggest industry players. Its largest positions include GE Aerospace (NYSE:GE) at 22.14%, RTX (NYSE:RTX) at 14.63%, and Boeing (NYSE:BA) at 9.35%. This fund was launched in 2006 and has a trailing-12-month dividend payout of $1.06 per share. Because it targets a select index of U.S. companies in the aviation and defense industries, its performance is heavily tied to these major contractors.
The Invesco fund holds 61 securities and offers a slightly broader reach across the defense ecosystem. Its top holdings include GE at 9.26%, Boeing at 8.47%, and RTX at 7.19%. Launched in 2005, the Invesco fund maintains a 91% weight in industrials and 9% in technology, and it has a trailing-12-month dividend payout of $0.79 per share. This fund is non-diversified, allowing it to maintain significant weightings in companies that are systematically important to national security and government space operations.
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What this means for investors
ITA has both fewer holdings and greater concentration risk. The top three positions account for close to half of the portfolio, with GE Aerospace alone weighing in at 22%. By contrast, the Invesco ETF’s top three holdings make up about 25% of the fund.
