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.
“An industry approach is likely the most appropriate means of harnessing the benefits of a far-reaching defense-spending program like the one Trump has proposed. This is underscored by the fact that 97% of the companies in the S&P Aerospace & Defense Select Industry Index are contractors for the Department of Defense,” according to State Street.
The S&P Aerospace & Defense Select Industry Index is the equal-weight index XAR tracks. XAR is up 8.4% year-to-date and nearly 26% over the past year. The ETF resides just 2.2% below its record high. XAR holds 37 stocks with a weighted average market capitalization of $21.6 billion, according to issuer data. The ETF turns six years old in September and charges 0.35% per year.
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