Launched on October 25, 2022, the First Trust Indxx Aerospace & Defense ETF (MISL) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Aerospace & Defense segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $213.8 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. MISL seeks to match the performance of the INDXX US AEROSPACE & DEFENSE INDEX before fees and expenses.
The Indxx US Aerospace & Defense Index consists of a universe of U.S. companies engaged in business activities associated with certain aerospace and defense sub-themes.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.6%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.76%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector -- about 96.6% of the portfolio.
Looking at individual holdings, General Aerospace Company (GE) accounts for about 8.39% of total assets, followed by Rtx Corporation (RTX) and Lockheed Martin Corporation (LMT).
The top 10 holdings account for about 59.3% of total assets under management.
Performance and Risk
The ETF has added about 33.11% so far this year and it's up approximately 26.7% in the last one year (as of 11/26/2025). In that past 52-week period, it has traded between $27.51 and $43.94.
The ETF has a beta of 0.66 and standard deviation of 17.09% for the trailing three-year period. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Indxx Aerospace & Defense ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MISL is a sufficient option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco Aerospace & Defense ETF (PPA) tracks SPADE Defense Index and the iShares U.S. Aerospace & Defense ETF (ITA) tracks Dow Jones U.S. Select Aerospace & Defense Index. Invesco Aerospace & Defense ETF has $6.48 billion in assets, iShares U.S. Aerospace & Defense ETF has $11.84 billion. PPA has an expense ratio of 0.58%, and ITA charges 0.38%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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First Trust Indxx Aerospace & Defense ETF (MISL): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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