What is Invesco Aerospace & Defense ETF?
PPA is a passive ETF, meaning it doesn’t try to pick winning stocks. Instead, it aims to replicate the performance of its benchmark, in this case, the SPADE™ Defense Index.
Unlike many benchmarks built by large indexing firms, this one was developed by defense-sector specialists. It uses a proprietary TrueCap™ methodology.
Most competing aerospace and defense indexes are market-cap-weighted with few restrictions, which in a narrow industry like this can cause a handful of large firms to dominate the index.
The SPADE Index takes a different approach by adjusting weights for conglomerates with aerospace and defense divisions, treating those segments as if they were standalone companies. This reduces the chance of outsized positions.
At each rebalancing, no single stock can exceed 10% of the index’s weight. Companies must also meet specific requirements: a minimum $250 million market cap, a share price of at least $5, adequate trading volume, consistent quarterly sales, and a U.S. exchange listing.
Exchange-Traded Fund (ETF)
How to buy Invesco Aerospace & Defense ETF (PPA)
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the ETF: Enter the ticker or ETF name into the search bar to bring up the ETF's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Holdings of Invesco Aerospace & Defense ETF
As of August 2025, the SPADE Defense Index and PPA held 56 companies, with about 92% of the portfolio in the industrials sector.
Unlike many competing aerospace and defense ETFs, PPA’s broader definition of “defense” allows it to selectively include technology stocks with cybersecurity and intelligence applications.
On average, the portfolio shows strong profitability with a 21.07% return on equity. However, it is trading at rich valuations of 55.59x book value and 28.37x forward earnings.
Even with its capped weighting methodology, the portfolio still includes all the major U.S. prime aerospace and defense contractors, but without the excessive concentration seen in some rivals. The top holdings are more balanced across companies.
Top holdings as of Aug. 1, 2025, include:
- General Electric (GE -0.78%) -- 8.16%
- Boeing (BA +1.55%) -- 8.12%
- RTX (RTX -0.44%) -- 7.65%
- Lockheed Martin (LMT -0.51%) -- 6.39%
- Northrop Grumman (NOC -0.04%) -- 5.41%
- General Dynamics (GD +2.71%) -- 4.66%
- Honeywell International (HON -2.05%) -- 4.13%
- L3Harris Technologies (LHX -0.02%) -- 4.10%
- Axon Enterprise (AXON +2.73%) -- 4.08%
- Howmet Aerospace (HWM -0.69%) -- 3.81%
Should I invest in Invesco Aerospace & Defense ETF?
If you’re a discerning aerospace and defense investor, PPA can be a stronger value proposition than many competitors. The difference lies in its benchmark.
The SPADE Defense Index was built specifically for this sector, with a weighting approach that limits concentration in a handful of oversized companies and better reflects the broader defense landscape, including select technology names tied to cybersecurity and intelligence.
Another advantage is SPADE’s industry focus. Beyond maintaining the index, SPADE runs a defense-focused newsletter and regularly publishes sector news and analysis, resources that many traditional index providers don’t offer.
This specialization helps keep the benchmark relevant and gives investors access to a deeper layer of industry insight alongside their ETF exposure.
Does Invesco Aerospace & Defense ETF pay a dividend?
Yes. As of August 2025, PPA paid a quarterly distribution with a 30-day SEC yield of 0.36%. This is on the lower side for the sector, as most aerospace and defense companies reinvest heavily in research and development instead of distributing excess cash. The lower yield also makes PPA relatively tax-efficient.
Expense ratio
PPA’s expense ratio is 0.57%, or $57 annually for every $10,000 invested. This fee is not paid upfront but is deducted on the back end, reducing overall returns. It’s higher than the average for aerospace and defense ETFs, where some competitors offer expense ratios below 0.40%.
Expense Ratio
Historical performance of Invesco Aerospace & Defense ETF
1-Yr | 3-Yr | 5-Yr | 10-Yr | |
Net Asset Value | 34.21% | 26.06% | 22.43% | 16.31% |
Market Price | 34.03% | 26.01% | 22.47% | 16.30% |
Related investing topics
The bottom line
PPA isn’t the cheapest aerospace and defense ETF, but it has been one of the stronger performers historically on a risk-adjusted basis.
Its use of a proprietary index from sector specialists has added credibility, and a track record dating back to 2005 strengthens its case for longevity.
Compared to some older competitors, it’s less top-heavy while still providing full exposure to the U.S. military-industrial complex.
However, unlike certain newer competitors, it does not include foreign aerospace and defense companies such as those from the U.K.
