For investors seeking momentum, SPDR S&P Aerospace & Defense ETF XAR is probably on the radar. The fund just hit a 52-week high and is up 58.9% from its 52-week low price of $137.09/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
XAR in Focus
The S&P Aerospace & Defense Select Industry Index represents the aerospace & defense sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Aerospace & Defense Index is a modified equal weight index. The product charges 35 bps in annual fees (See: All Industrials ETFs).
Why the Move?
The Aerospace and Defense sector has been an area to watch lately, given the complicated geopolitical landscape. Increased defense spending by global economies has also boosted the fund’s prospects.
Additionally, trying to become less reliant on the United States, Europe is strengthening its military capabilities and significantly increasing its defense spending, which bodes well for the fund. Escalating geopolitical tensions in Asia should also boost the fund’s prospects.
More Gains Ahead?
Currently, XAR has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. However, it might continue its strong performance in the near term, with a positive weighted alpha of 56.91 (as per Barchart.com), which gives cues of a further rally.
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SPDR S&P Aerospace & Defense ETF (XAR): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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