PPA: INVESCO AEROSPACE & DEFENSE ETF
What this ETF is trying to do
The INVESCO AEROSPACE & DEFENSE ETF (PPA) is designed to invest in companies within the aerospace and defense sectors. This means the fund focuses on businesses involved in making aircraft, spacecraft, and military equipment. Based on its top holdings, the fund has significant exposure to major industry players like Boeing Co, GE Aerospace, and RTX Corp.
What the numbers show
The current price of PPA is $155.02. When looking at how the share price has moved, we can see different results depending on the time frame:
• Year-to-Date (YTD): The price return is approximately -1.03%.
• One Year: The one-year price return is approximately -1.08%.
• Three Years: The three-year price return is approximately 88.15%.
It is important to distinguish between price return (how much the share price changed) and total return (which includes distributions). For example, over the last year, while the price return was -1.08%, the one-year total return was approximately -0.68%. Over three years, the total return of 91.54% was slightly higher than the price return of 88.15%.
An estimated price from roughly one year ago was $156.71.
Income and distribution explanation
PPA provides some income through distributions, but it is not a high-yield fund. The distribution yield is approximately 0.43%. Over the last 12 months, there were 3 distributions. The frequency of these payments is described as "irregular" or "less frequent."
NAV erosion explanation
In investing, "NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.
However, we can look at the erosion-risk score. PPA has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present. This suggests that the fund's price trends do not currently show signs of significant deterioration according to these risk measurements.
Pros
• Strong Long-Term Growth: The fund has shown significant three-year and five-year total returns.
• Stable Risk Profile: The erosion-risk score indicates a stable price trend.
Cons
• Recent Price Declines: The fund has experienced slight negative price returns year-to-date and over the last year.
• Low Income: The distribution yield is relatively low compared to income-focused funds.
Beginner takeaway
PPA focuses on the aerospace and defense industry. While it has seen some small declines in share price over the last year, its long-term history shows much higher growth. It is not primarily an income fund, as its distribution yield is quite low. Investors should remember that price returns and total returns are different; total return accounts for the cash distributions paid out by the fund.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | BOEING CO | BA | 8.95% |
| 2 | GE AEROSPACE | GE | 8.93% |
| 3 | RTX CORP | RTX | 8.87% |
| 4 | LOCKHEED MARTIN CORP | LMT | 7.94% |
| 5 | GENERAL DYNAMICS CORP | GD | 5.18% |
| 6 | NORTHROP GRUMMAN CORP | NOC | 4.67% |
| 7 | HOWMET AEROSPACE INC | HWM | 4.13% |
| 8 | HONEYWELL AEROSPACE INC | HONA | 3.82% |
| 9 | L3HARRIS TECHNOLOGIES INC | LHX | 3.77% |
| 10 | PARKER HANNIFIN CORP | PH | 3.71% |