Wednesday was an eventful day for Dow component Boeing
In another development for Boeing, the World Trade Organization has ruled that European governments were providing improper subsidies to Airbus, Boeing’s main competitor, in the form of government loans at below-market interest rates. The WTO panel said that the loans were expected to aid export sales, and that the subsidies should be withdrawn in 90 days. Although the Europeans are expected to appeal this decision by the WTO, the move could help to sway the Pentagon toward awarding a $40 billion contract for refueling tankers to Boeing instead of its European rival. Should that happen, look for shares of BA to take off.
For investors who believe that the WTO decision will boost Boeing, or that BA’s play for Argon ST will set off a consolidation wave across the aerospace and defense, there are a few ETFs that may make interesting plays. These two ETFs, found in the Industrials Equities ETFdb Category, both have a focus on the aerospace & defense industry [also see Aerospace & Defense ETFs Head-To-Head]:
PowerShares Aerospace & Defense
PPA allocates 6.4% of its assets to Boeing, as well as large allocations to industrial giants Honeywell
iShares Dow Jones U.S. Aerospace & Defense Index Fund
ITA allocates a slightly higher percentage of its assets towards Boeing, with almost 8% going towards the aerospace giant. In addition to Boeing, ITA allocates high levels of assets towards United Technologies (8.2%) and General Dynamics
Eric is long ITA.
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