PPA Offers Exposure to Defense Stocks

Aerospace and defense stocks strengthened on Tuesday following reports of Russian missiles crossing into Poland.  In the biggest barrage of missiles yet, Russia pounded Ukraine’s energy facilities Tuesday, striking targets across the country and causing widespread blackouts, The Associated Press reported.   A senior U.S. intelligence official said missiles crossed into NATO member Poland, killing two people. A second person confirmed to AP that apparent Russian missiles struck a site in Poland about 15 miles from the Ukrainian border, AP reported.  Polish government spokesman Piotr Mueller said top leaders were holding an emergency meeting due to a “crisis situation.”  Defense stocks surged early in the year as geopolitical tensions between Russia and Ukraine intensified, prompting investors to look to defense ETFs like the Invesco Aerospace & Defense ETF (PPA B+). Since the beginning of the Russia-Ukraine war on February 24, PPA has taken in $949 million in net inflows. Incepted in 2005, PPA has $1.7 billion in assets under management.  PPA tracks the SPADE Defense Index, investing in defense stocks spanning all market caps. These companies are involved in the development, manufacturing, operations, and support of U.S. defense, homeland security, and aerospace operations. The fund and the index are rebalanced and reconstituted quarterly, according to Invesco.  PPA holds 56 defense stocks as of November 14. The top holdings include Boeing Company (BA), Raytheon Technologies Corporation (RTX), Lockheed Martin Co. (LMT), General Dynamics Corporation (GD), Northrop Grumman Corporation (NOC), Honywell International Inc (HON), General Electric Company (GE), L3Harris Technologies Inc (LHX), Axon Enterprise Inc (AXON), TransDigm Group Incorporated (TDG), and Textron Inc (TXT), according to VettaFi.  PPA charges a 61 basis point fee. The defense ETF has returned 12.33% over one month and 7.02% year to date through November 14, according to VettaFi. For more news, information, and strategy, visit the Innovative ETFs Channel.

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