GET DAILY SIGNALSITA vs PPA: Comparing Two Leading Aerospace and Defense ETFs
Key Takeaways
- Both funds are passively managed aerospace and defense ETFs, but they track different indexes: ITA follows the Dow Jones U.S. Select Aerospace & Defense Index, while PPA follows the SPADE Defense Index.
- ITA is cheaper (0.37% expense ratio) and more concentrated in sector leaders, whereas PPA (0.58%) is more diversified, with roughly 68 holdings and a modest information technology tilt.
- ITA skews almost entirely to industrials, while PPA adds exposure to technology and communication services names such as PLTR and RKLB.
- PPA's broader, more balanced portfolio has historically shown lower volatility and beta, while ITA's concentration amplifies exposure to mega-cap defense primes.
- Tickeron AI Verdict: ITA — the AI favors ITA for its lower cost, deeper liquidity, and concentrated exposure to sector-momentum leaders.
Why These Two ETFs Matter
For investors seeking exposure to U.S. defense and aerospace, ITA and PPA stand out as two of the most prominent and directly comparable exchange-traded funds. They compete for the same investor dollars and differ primarily in index construction, diversification, and cost. I think comparing their structural profiles, sector exposure, and relative positioning is timely right now, as elevated global defense budgets, supply-chain rebuilding, and a shifting commercial aerospace cycle continue to influence fund performance. I also checked this using Tickeron’s AI Screener to see how the two line up against peers in the industry.
iShares U.S. Aerospace & Defense ETF (ITA) Overview
ITA is a passively managed, market-cap-weighted fund that seeks to track the Dow Jones U.S. Select Aerospace & Defense Index, a benchmark of U.S. aerospace and defense equities defined by S&P Dow Jones Indices. The fund typically holds around 50 to 54 names and carries a net expense ratio of 0.37%, among the lowest in its category.
The portfolio is heavily concentrated in the sector's largest companies. Its top holdings include GE Aerospace (roughly 20% of assets), RTX Corporation, BA Boeing, GD General Dynamics, LMT Lockheed Martin, NOC Northrop Grumman, HWM Howmet Aerospace, TDG TransDigm, and LHX L3Harris Technologies. Sector allocation is effectively 100% industrials, reflecting the fund's pure-play focus. As a non-diversified fund, single-stock concentration — particularly in GE Aerospace and RTX — is a defining structural feature.
Invesco Aerospace & Defense ETF (PPA) Overview
PPA is a passively managed index fund that seeks to track the SPADE Defense Index, a market-cap-weighted benchmark of U.S.-listed companies involved in defense, military, homeland security, and government space operations. It holds roughly 68 names and charges a net expense ratio of 0.58%. The index is rebalanced and reconstituted quarterly.
PPA shares many mega-cap anchors with ITA — including RTX, LMT Lockheed Martin, BA Boeing, and GE Aerospace — but spreads weight more evenly and reaches further into the supply chain with holdings such as PH Parker-Hannifin and HONA Honeywell Aerospace. Its sector allocation is approximately 92% industrials, with a meaningful information technology sleeve (around 7%) plus a small communication services position. This broader, less concentrated profile lowers single-name risk relative to ITA.
The Current Aerospace and Defense Landscape
Both ETFs operate in an environment shaped by structurally rising government budgets, sustained geopolitical tensions, and efforts to replenish munitions and modernize fleets. At the same time, the commercial aerospace recovery has been uneven, as production-rate ramp-ups for narrowbody aircraft and lingering supply-chain constraints weigh on airframe and engine manufacturers. Capital flows into defense names have been supported by multi-year procurement visibility, while regulatory scrutiny, budget cycles, and high valuations present ongoing risks. Interest-rate expectations also matter, given the capital-intensive, long-cycle nature of defense contracts and commercial aircraft programs.
Performance and Positioning Comparison
In recent market cycles, ITA's concentrated exposure to top momentum leaders has made it more sensitive to moves in its largest holdings, while PPA's broader, lower-beta portfolio has tended to exhibit lower volatility and smaller drawdowns. When mega-cap primes and aerospace suppliers lead the sector rotation, ITA's heavier top-tier concentration can amplify upside; when leadership broadens into mid-caps or technology-adjacent defense names, PPA's wider footprint provides a relative advantage. Cost also compounds over time: ITA's 0.37% fee versus PPA's 0.58% gives the iShares fund a modest structural tailwind for long-term holders.
Tickeron AI Verdict
Based on observable factors such as cost efficiency, liquidity, trend consistency, and exposure to sector-momentum leaders, Tickeron's AI would currently favor ITA. Its lower expense ratio, deeper trading liquidity, and concentrated positioning in high-momentum primes such as GE Aerospace and RTX give it a structural edge in trend-following environments. PPA's broader diversification and lower volatility remain attractive for risk-conscious investors, but on a relative-positioning basis, the AI would lean toward ITA for its combination of scale, cost advantage, and concentrated sector leadership.
Exploring Sector Opportunities with Tickeron Tools
From what I see, tools like the AI Screener can be useful when digging into sector-specific ETFs. I often run quick scans to compare holdings, expense ratios, and recent performance trends side by side. It helps surface ideas without spending hours on manual research, especially when evaluating options like ITA and PPA in a fast-moving industry.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Financial analyst and market blogger with expertise in equity research, fundamental analysis, and macroeconomic trends. I regularly publish coverage on individual stocks, ETFs, and sector developments — combining rigorous financial analysis with clear, engaging writing for a broad investment audience.
PPA's RSI Indicator ascends from oversold territory
The RSI Oscillator for PPA moved out of oversold territory on October 09, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 20 similar instances when the indicator left oversold territory. In 19 of the 20 cases the stock moved higher. This puts the odds of a move higher at 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 26, 2026. You may want to consider a long position or call options on PPA as a result. In 69 of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 85%.
The Moving Average Convergence Divergence (MACD) for PPA just turned positive on October 01, 2026. Looking at past instances where PPA's MACD turned positive, the stock continued to rise in 40 of 45 cases over the following month. The odds of a continued upward trend are 89%.
Following a +3.37% 3-day Advance, the price is estimated to grow further. Considering data from situations where PPA advanced for three days, in 291 of 340 cases, the price rose further within the following month. The odds of a continued upward trend are 86%.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
PPA moved below its 50-day moving average on October 30, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PPA declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 82%.
PPA broke above its upper Bollinger Band on October 29, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for PPA entered a downward trend on October 28, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
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