Defense exchange-traded funds (ETFs) are index funds that hold stocks of companies within the aerospace and defense sector. ETFs can help supplement your portfolio by giving you exposure to stocks known for their growth, stability and dividends. Because of the growing demand for aviation, increases in defense spending and developing interest in the space industry, we’ve curated a list of the best defense ETFs to buy now.(1)
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The list below comprise the top 6 defense ETFs by year-to-date performance. Included is each ETF’s expense ratio, 1-year return and 5-year return. To settle on these picks, we chose only equity ETFs in the Aerospace & Defense sector with an expense ratio under 1%. No leveraged ETFs and no inverse ETFs were included in this list.
| Logo | ETF name and ticker | ETF description | Expense Ratio | YTD return |
|---|---|---|---|---|
 | SPDR S&P Kensho Future Security ETF (FITE) | FITE ETF tracks the performance of the S&P Kensho Future Security Index, focusing on security innovations across cyber security, border security and military applications. | 0.45% | 6.82% |
| SPDR S&P Aerospace & Defense ETF (XAR) | XAR ETF provides investors with diversified exposure to the aerospace and defense industry by tracking the S&P Aerospace & Defense Select Industry Index. | 0.35% | 4.95% |
 | Invesco Aerospace & Defense ETF (PPA) | PPA ETF by Invesco offers investors exposure to the aerospace and defense industry, comprising major defense companies. | 0.58% | 4.34% |
 | ARK Space Exploration & Innovation ETF (ARKX) | ARKX is an ETF by ARK Invest, focusing on space exploration and innovation companies. | 0.70% | 4.04% |
 | iShares U.S. Aerospace & Defense ETF (ITA) | ITA ETF tracks the Dow Jones U.S. Select Aerospace & Defense Index, offering broad exposure to U.S. manufacturers of commercial and military aircrafts and other defense equipment. | 0.40% | -1.13% |
If you’re wondering how to get started with investing in defense stocks, follow these steps:
Defense ETFs offer a convenient way to gain exposure to stocks of companies in the aerospace and defense sector without having to buy each stock individually. With growing demand across the aviation and space industry and ever-increasing defense spending, investors may want to consider if defense ETFs should have a place in their portfolio.
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