The good news is that Boeing (BA) is doing so well that defense-related exchange traded funds (ETFs) might take off along with their order numbers. But the company might be doing a little too well.

Nicola Clark for the New York Times reports that in 2005 and 2006, Boeing and its rival Airbus, added a combined 4,000 contracts. That’s equivalent to 4 years of production. In 2007, they added another three years to their backlogs.

Ordinarily, a rush of orders like that would be a good thing. But since the economy has slowed and may even slow further, there are now questions of whether the airlines will actually be able to take delivery of these new planes once they’re built.

It’s all up in the air, so to speak, but at least the airline industry returned a profit in 2007 for the first time in six years. That, in turn, gave several carriers the money to invest in bigger and better aircraft.

These defense and transportation ETFs could be worth keeping an eye on this year:

  • PowerShares Aerospace & Defense (PPA), Boeing is 5.02%
  • iShares Dow Jones US Aerospace & Defense (ITA), Boeing is 8.44%
  • iShares Dow Jones Transportation Average (IYT)

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.

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