PPA vs ARKX Aerospace ETF Showdown: Which ETF Is the High Flier for 2026?

Investors choosing between Invesco Aerospace & Defense ETF (NYSEMKT:PPA) and ARK Space & Defense Innovation ETF (NYSEMKT:ARKX) may weigh the lower costs of PPA against the more aggressive, technology-focused strategy of ARKX.

Both funds target the final frontier, but they take different trajectories. Invesco Aerospace & Defense ETF tracks a concentrated index of domestic aerospace and defense companies, providing exposure to traditional military contractors. In contrast, ARK Space & Defense Innovation ETF is an actively managed fund that casts a wider, more speculative net across orbital and suborbital technologies.

Snapshot (cost & size)

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.

ARK Space & Defense Innovation ETF charges 0.75%, making it the more expensive option compared to the 0.58% fee for Invesco Aerospace & Defense ETF. These costs represent the annual management fees deducted from fund performance to cover administrative and oversight expenses.

Performance & risk comparison

What's inside

The Invesco Aerospace & Defense ETF is an industrials-heavy portfolio with approximately 90% of assets concentrated in that sector. Its largest positions include GE Aerospace (NYSE:GE)at 7.3%, RTX Corp (NYSE:RTX) at 7.2%, and Boeing Co. (NYSE:BA) at 7.1%. It holds 62 different securities and was launched in 2005. It focuses on companies systematically important to U.S. national security and government space operations, favoring established firms with significant defense contracts.

The ARK Space & Defense Innovation ETF leans more toward the technology sector, which accounts for 24% of its weight, although industrials still represent 59% of the portfolio. Its top holdings include Space Exploration Technologies (NASDAQ:SPCX) at 8.8%, L3Harris Technologies (NYSE:LHX) at 6.5%, and Rocket Lab Corp at 6.4%. It holds 45 securities and was launched in 2021. It seeks long-term capital appreciation by investing in companies leading orbital and suborbital space innovation, including firms that use satellite technology for terrestrial applications such as precision agriculture.

Which fund is the better buy?

While these ETFs cover the same sector, they differ significantly from one another.

The key difference between the Invesco Aerospace & Defense ETF — PPA — and the ARK Space & Defense Innovation ETF — ARKX — is that PPA is a passively managed ETF meant to reflect an index, the SPADE Defense Index, while ARKX is actively managed, meaning a person or team is making decisions to shift assets among its investment landscape. Indeed, the weightings of ARKX’s top 10 holdings change frequently, such as the addition of SpaceX since its IPO on June 12.

The active hand is paying off. The year-to-date return of ARKX is about 11.5%, with a 33.7% one-year return. PPA has performed decently, with year-to-date and 1-year returns of 12.2% and 24.6%, respectively.

Longer-term PPA has respectable 5-year and 10-year returns of 19.4% and 17.8%, respectively. ARKX has a 10.2% 5-year return (and no 10-year return given its age).

The long-term results of PPA are a strong argument for that fund. But If you trust that the active managers who have posted a good 1-year return are acting on skill and insight, then the ARK Space & Defense Innovation ETF is the better choice.

For more guidance on ETF investing, check out the full guide at this link.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing, Deere & Company , GE Aerospace, L3Harris Technologies, and RTX. The Motley Fool has a disclosure policy.