iShares vs. Invesco: Which Aerospace ETF Is Best for Your Portfolio in 2026?
Key Points
iShares U.S. Aerospace & Defense ETF offers a significantly lower expense ratio than Invesco's fund.
The Invesco ETF has delivered higher five-year total growth, while iShares' fund outperformed over the past 12 months.
The iShares ETF is more concentrated in its top holdings, with its largest three positions making up nearly half of the portfolio.
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Investors looking for lower costs and a more concentrated bet on major defense contractors may favor iShares U.S. Aerospace & Defense ETF (NYSEMKT:ITA), while Invesco Aerospace & Defense ETF (NYSEMKT:PPA) offers a slightly broader industrials mix.
These two exchange-traded funds serve as primary gateways for investors seeking to capitalize on the U.S. aerospace and defense sectors. While both track companies that build fighter jets, satellites, and naval vessels, they differ in how they weight their portfolios and the costs they charge for that exposure.
Snapshot (cost & size)
| Metric | PPA | ITA |
|---|---|---|
| Issuer | Invesco | iShares |
| Expense ratio | 0.58% | 0.38% |
| 1-yr return (as of June 24, 2026) | 25.4% | 30% |
| Dividend yield | 0.4% | 0.5% |
| Beta | 0.87 | 1.01 |
| AUM | $8.1 billion | $14.1 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares ETF is more affordable for long-term holders, carrying an expense ratio of 0.38% compared to 0.58% for the Invesco fund. The ETFs offer similar trailing-12-month dividend yields.
Performance & risk comparison
| Metric | PPA | ITA |
|---|---|---|
| Max drawdown (5 yr) | (18.4%) | (18.7%) |
| Growth of $1,000 over 5 years (total return) | $2,327 | $2,205 |
The iShares ETF focuses on 49 holdings, making it a relatively concentrated option for those who want exposure to the biggest industry players. Its largest positions include GE Aerospace (NYSE:GE) at 22.14%, RTX (NYSE:RTX) at 14.63%, and Boeing (NYSE:BA) at 9.35%. This fund was launched in 2006 and has a trailing-12-month dividend payout of $1.06 per share. Because it targets a select index of U.S. companies in the aviation and defense industries, its performance is heavily tied to these major contractors.
The Invesco fund holds 61 securities and offers a slightly broader reach across the defense ecosystem. Its top holdings include GE at 9.26%, Boeing at 8.47%, and RTX at 7.19%. Launched in 2005, the Invesco fund maintains a 91% weight in industrials and 9% in technology, and it has a trailing-12-month dividend payout of $0.79 per share. This fund is non-diversified, allowing it to maintain significant weightings in companies that are systematically important to national security and government space operations.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
ITA has both fewer holdings and greater concentration risk. The top three positions account for close to half of the portfolio, with GE Aerospace alone weighing in at 22%. By contrast, the Invesco ETF's top three holdings make up about 25% of the fund.
ITA has a better one-year return and costs less to own. It also has higher average trading volume, which some investors may find attractive. I personally don't find either ETF especially compelling. ITA's elevated concentration risk is pretty much the opposite of what I seek out in an ETF, while PPA's 0.58% expense ratio seems a bit steep.
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Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing, GE Aerospace, and RTX. The Motley Fool has a disclosure policy.
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