Keep an eye on defense ETFs.
For one, tensions are boiling with Russia and China. Just days ago, the two countries conducted a joint naval operation near the coast of Alaska, which was a first. While they have since left the region, it’s “yet “yet another reminder that we have entered a new era of authoritarian aggression led by the dictators in Beijing and Moscow,” said Alaskan Sen. Dan Sullivan.
Two, there’s the ongoing conflict between Russia and Ukraine, and with Iran. And three, members of Congress want to boost defense spending by $832 billion, which includes $8 billion in emergency funds. Of the funds, $1.1 billion is to be set aside for military aid to Taiwan, as noted by DefenseNews.com.
With so much going on, it just makes sense to diversify with top defense stocks ETFs.
SPDR S&P Aerospace & Defense ETF (XAR)
With an expense ratio of 0.35%, the XAR ETF invests in top aerospace and defense stocks, including Textron, HEICO Corp., Boeing, General Dynamics, and BWX Technologies to name a few of the top ones. Since June, the XAR ETF ran from about $110 to a recent high of $122. From here, we’d like to see it retest $127.50.
iShares U.S. Aerospace & Defense ETF (ITA)
With an expense ratio of 0.40%, the ITA ETF invests in companies that manufacture commercial and military aircraft and defense equipment. Some of its top holdings include Boeing, RTX Corp., Lockheed Martin, General Dynamics, Textron, and L3 Harris Technologies. Since June, the ITA ETF ran from about $108 to $118. We’d like to see it closer to $130.
