Aerospace and defense ETFs, including the iShares U.S. Aerospace & Defense ETF (Cboe: ITA), were among the best industry level performers last year, but amid fears of trade wars, the group is enduring challenges this year.

Still, ITA, the largest ETF in the group, is up 5% year-to-date and some analysts believe aerospace and defense companies could deliver some good news for investors as second-quarter earnings roll in.

Credit Suisse analyst Robert Spingarn is bullish on Dow component Boeing Co. (NYSE: BA), usually one of the largest holdings in cap-weighted aerospace ETFs, “because of its recently announced delivery data; even with somewhat light 737 deliveries,” reports Teresa Rivas for Barron’s.

Boeing was one of the primary drivers of the aersospace industry’s out-performance from the time President Trump won the 2016 presidential election. Now the company is being hampered by tariff talk.

According to The Street, “China is Boeing’s biggest export market and the 737 is its biggest selling product. The country is expected to surpass the U.S. as the world’s biggest buyer of aircrafts by as early as 2022.”

Aerospace & Defense Industry View

Aerospace and defense stocks are part of the broader industrial sector and have been important drivers of the sector’s performance over the past year. In fact, aerospace and defense names have been industrial leaders. Rivals to ITA, the largest ETF in this market segment, include the PowerShares Aerospace & Defense Portfolio (NYSEArca: PPA) and the SPDR S&P Aerospace & Defense ETF (NYSEArca: XAR).

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