#7 - SPDR S&P Aerospace & Defense ETF (NYSEARCA:XAR)
Exchange-traded funds (ETFs) are solid choices for investors who want diversified exposure to a sector. When it comes to defense stocks, the SPDR S&P Aerospace & Defense ETF (NYSE: XAR) is a solid choice. This is an equal-weight fund, meaning that none of the holdings is more than 4.98% of the total fund’s weight, which helps hedge against risk.
As of June 2024, the fund had 34 holdings, many of which are large caps. But it also has some speculative plays, such as Archer Aviation Inc. (NYSE: ACHR), a leader in the emerging eVTOL (electric vertical take-off and landing) vehicles. The fund also provides exposure to the emerging space economy, which could be positive or negative, depending on your risk tolerance.
The XAR has $2.12 billion of assets under management, and the expense ratio, which has been above 0.5% in the past, is now around 0.38% and more attractive to investors.
About SPDR S&P Aerospace & Defense ETF
The SPDR S&P Aerospace & Defense ETF (XAR) is an exchange-traded fund that mostly invests in industrials equity. The fund tracks an equal-weighted index of US aerospace & defense companies. XAR was launched on Sep 28, 2011 and is managed by State Street.
- Current Price
- $158.33
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 4 Buy Ratings, 10 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $167.65 (5.9% Upside)
As we mentioned, defense spending makes up a significant part of the federal budget in both wartime and peacetime. This brings to mind another exceptional reason to own defense stocks: they serve as a great hedge that can mitigate risk.
That's because our government's consistent defense spending makes defense stocks defensive in nature. When the market is growing, these stocks may not deliver market-beating performance. But during pullbacks, they can put a floor on your losses.
Whether or not you approve of the amount our country spends on national (and international) defense, it's not going away. And no matter who wins in November, those dollars spent are set to increase.
Your only decision is if you want to participate from an investment perspective. And MarketBeat is with you every step of the way, with tools like instant alerts on news that impact the stocks - defense or otherwise - on your watchlist.
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