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Investment expert Jim Woods shares the details on this aerospace and defense fund.

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This Aerospace and Defense Fund Gets the Job Done

Investment expert Jim Woods shares the details on this aerospace and defense fund.

The PowerShares Aerospace & Defense ETF (PPA) is a smaller exchange-traded fund (ETF) than the two ā??big gunsā? in the aerospace and defense sector — the SPDR S&P Aerospace & Defense ETF (XAR) and the iShares U.S. Aerospace and Defense ETF (ITA) — but the mighty mite has generated some substantial returns this year.

This fund offers a traditional take on a market sector by investing in defense companies. The defense industry makes up about 5% of U.S. gross domestic product (GDP).

The fund allocates to the companies it holds by using a market-cap-weighting strategy. As a result, more than half of PPAā??s assets are invested in large-cap securities, with mid-caps making up another 35%.

The companies held in the portfolio range between value and growth, with a greater percentage of the companies characterized as growth investments, but only narrowly so. This fund pays out a dividend yield of slightly more than 1%, while the expense ratio comes in at around 0.6%. Assets managed currently total $775 million.

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Written By

Jim Woods is a freelance financial journalist specializing in the markets and the economy. He champions the cause of liberty from a secured location deep inside the Golden State.

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archive

This Aerospace and Defense Fund Gets the Job Done

The PowerShares Aerospace & Defense ETF (PPA) is a smaller exchange-traded fund (ETF) than the two ā€œbig gunsā€ in the aerospace and defense sector — the SPDR S&P Aerospace & Defense ETF (XAR) and the iShares U.S. Aerospace and Defense ETF (ITA) — but the mighty mite has generated some substantial returns this year.

This fund offers a traditional take on a market sector by investing in defense companies. The defense industry makes up about 5% of U.S. gross domestic product (GDP).

The fund allocates to the companies it holds by using a market-cap-weighting strategy. As a result, more than half of PPAā€™s assets are invested in large-cap securities, with mid-caps making up another 35%.

The companies held in the portfolio range between value and growth, with a greater percentage of the companies characterized as growth investments, but only narrowly so. This fund pays out a dividend yield of slightly more than 1%, while the expense ratio comes in at around 0.6%. Assets managed currently total $775 million.

Click here to read the rest of the article, “This Aerospace and Defense Fund Gets the Job Done.

Newsletter Signup.

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