The latest sell-off in aerospace and defense shares could be an indicator for some investors to consider value, while enjoying the dividend flow that these giant companies stream. [Budget, Spending Concerns Ground Aerospace and Defense ETFs]
“Many aerospace and defense firms are high-quality firms, with barriers to entry, substantial scale, and duopoly or oligopoly-like characteristics regarding the specific products that they produce. As a result, aerospace and defense companies are able to extract pricing and enjoy economies of scale,” Robert Goldsborough for Morningstar wrote in an ETF analysis.
PowerShares Aerospace and Defense ETF (NYSEArca: PPA) has $55.3 million in assets under management. The fund’s largest holdings include HoneyWell International (NYSE: HON), United Technologies (NYSE: UTX) and Boeing (NYSE: BA). The iShares Dow Jones U.S. Aerospace and Defense Index Fund (NYSEArca: ITA) has $108 billion in assets under management. Top holdings include United Technologies (NYSE: UTX), Boeing (NYSE: BA) and Precision Castparts (NYSE: PCP).
PowerShares Aerospace and Defense ETF
Tisha Guerrero contributed to this article.