A Joe Biden administration can help fuel the aerospace and defense (A&D) industry if the incoming president bolsters spending in this sector. More forecasted growth in the industry can only help fuel the Direxion Daily Aerospace & Defense 3X Shares ETF (DFEN).

DFEN seeks daily investment results equal to 300% of the daily performance of the Dow Jones U.S. Select Aerospace & Defense Index, which attempts to measure the performance of the aerospace and defense industry of the U.S. equity market. Like the rest of Direxion’s roster of leveraged ETFs, DFEN gives traders the ability to:

  • Magnify short-term perspective with daily 3X leverage;
  • Go where there’s opportunity, with bull and bear funds for both sides of the trade; and
  • Stay agile – with liquidity to trade through rapidly changing markets

The fund has been ticking higher in November with the anticipation of a vaccine and a forthcoming Joe Biden presidency.

Traders looking for an entry point may want to keep DFEN on their watch lists and see if there’s any year-end selling come the end of December. At that point, traders can make a fundamental play on whether Biden can match or increase the previous Trump administration’s defense spending.

DFEN Chart

Unprecedented Growth Ahead for A&D?

As far as more fundamental signs are concerned, the aerospace and defense industry looks primed for growth. This is especially the case in the military A&D lifecycle management market.

“The global military aerospace and defense lifecycle management market size is anticipated to reach USD 14.2 billion by 2027, registering a CAGR of 8.4% from 2020 to 2027, according to a new report by Grand View Research, Inc,” a Digital Journal article noted. “The growing demand for Product Lifecycle Management (PLM) software solutions from the defense equipment manufacturers and suppliers is expected to drive the market growth. PLM software solutions help the defense equipment manufacturers and suppliers in every facet of the process, right from the initial concept to development and testing processes, and efficient manufacturing.”

“Manufacturers of military aerospace and defense (A&D) equipment often have to deal with several complex components,” the article added. “PLM software solutions can potentially enable all these manufacturers with the capabilities that can be implemented with complex systems and facilities and help them in reducing energy consumption.

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