by Ian Cooper
Tensions are boiling over with Russia.
After President Biden’s trip to Ukraine, Russian president Vladimir Putin suspended the country’s participation in the New START treaty, a nuclear arms control pact with the U.S.
Putin also warned of a “global war” as he doubled down on Ukraine, with threats of nuclear force. According to The Sun, “Moscow’s nuclear doctrine clearly states their forces can use nuclear weapons when the country’s “very existence” is at risk. Elsewhere in the speech, Putin also vowed Russia would ditch participation in a key arms control treaty – further ramping up the nuclear danger with the West.”
In response, U.S. Secretary of State Antony Blinken said, “We’ll be watching carefully to see what Russia actually does, we’ll of course make sure that in any event that we are posturing appropriately for the security of our own country and that of our allies,” as quoted by CNN. “I think it matters that we continue to act responsibly in this area… it’s also something the rest of the world expects of us.”
If things get out of control, consider these top defense ETFs.
Invesco Aerospace & Defense ETF (PPA)
One of the best ways to diversify with defense stocks is with an ETF like the Invesco Aerospace & Defense ETF (PPA). Not only do you gain exposure to most of the industry heavyweights, you can do so at less cost.
With an expense ratio of 0.58%, the PPA ETF offers exposure to companies involved in the development, manufacturing, operations and support of US defense, homeland security and aerospace operations. Some of its top holdings include Lockheed Martin, Boeing, Raytheon Technologies, Honeywell, General Dynamics, and L3 Harris Technologies.
SPDR S&P Aerospace & Defense ETF (XAR)
With an expense ratio 0.35%, the SPDR S&P Aerospace & Defense ETF seeks to provide returns that correspond to the S&P Aerospace & Defense Select Industry Index. Some of its top holdings include Mercury Systems, Axon Enterprise, Northrop Grumman, Lockheed Martin, General Dynamics Corp., and L3 Harris Technologies Inc.
iShares U.S. Aerospace & Defense ETF (ITA)
The ITA ETF is another hot defense ETF to consider. With an expense ratio of 0.39%, the iShares US Aerospace & Defense ETF invests in stocks in the domestic aerospace and defense sector. These stocks can include companies that manufacture both commercial and military aircraft as well as other types of defense-related equipment. It has holdings in Boeing, United Technologies Corporation, Lockheed Martin, Raytheon, General Dynamics, and Northrop Grumman for example.