Should You Invest in the iShares U.S. Aerospace & Defense ETF (ITA)?

Designed to provide broad exposure to the Industrials - Aerospace & Defense segment of the equity market, the iShares U.S. Aerospace & Defense ETF (ITA) is a passively managed exchange traded fund launched on 05/01/2006.

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.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $6.55 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. ITA seeks to match the performance of the Dow Jones U.S. Select Aerospace & Defense Index before fees and expenses.

The Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.40%, 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 99.80% of the portfolio.

Looking at individual holdings, Ge Aerospace (GE) accounts for about 19.79% of total assets, followed by Rtx Corp (RTX) and Boeing (BA).

The top 10 holdings account for about 76.55% of total assets under management.

Performance and Risk

The ETF has added roughly 10.34% so far this year and is up about 20.76% in the last one year (as of 05/07/2025). In that past 52-week period, it has traded between $131.58 and $161.36.

The ETF has a beta of 0.83 and standard deviation of 19.49% for the trailing three-year period, making it a medium risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.

Alternatives

IShares U.S. Aerospace & Defense ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ITA is an outstanding option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

SPDR S&P Aerospace & Defense ETF (XAR) tracks S&P Aerospace & Defense Select Industry Index and the Invesco Aerospace & Defense ETF (PPA) tracks SPADE Defense Index. SPDR S&P Aerospace & Defense ETF has $2.80 billion in assets, Invesco Aerospace & Defense ETF has $4.82 billion. XAR has an expense ratio of 0.35% and PPA charges 0.57%.

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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This article originally published on Zacks Investment Research (zacks.com).

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