Believe it or not, there is an exchange traded fund (ETF) that profits from the Iraq war: PowerShares Aerospace & Defense (PPA). PPA typically invests at least 80% of its total assets in aerospace and defense companies. It tracks the SPADE Defense index and is nondiversified. Currently PPA is up 19.0% year-to-date and is well above its long-term trend line.

As the war in Iraq continues and defense supplies are needed, it’s no wonder PPA is doing well. The current request for Iraq-related financing for 2008 is $116 billion, which would raise the total Iraq war spending to $567 billion, reports Michael Brush for MSN Money. Unfortunately, it’s been notoriously difficult to keep tabs on where all the money for the war is going, but at least some of it is guaranteed for defense companies. One such defense company that is in PPA’s top holdings is L-3 Communications Holdings (LLL), which is a lead supplier of military and security electronics. It’s up 20.9% year-to-date.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.