For investors seeking momentum, iShares U.S. Aerospace & Defense ETF ITA is probably on the radar. The fund just hit a 52-week high and is up 29.63% from its 52-week low price of $129.14/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:
ITA in Focus
The Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market. The product charges 40 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. Global military spending rose to $2.72 trillion in 2024, marking a record 9.4% increase over 2023, the sharpest annual rise since the end of the Cold War.
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, ITA has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook. However, it might continue its strong performance in the near term, with a positive weighted alpha of 23.62 (as of Barchart.com), which gives cues of a further rally.
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iShares U.S. Aerospace & Defense ETF (ITA): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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