What Is PPA? Invesco Aerospace & Defense ETF

PPA is the Invesco Aerospace & Defense ETF, a single ticker that gives you ownership of roughly 60 US companies across defense, aerospace, and homeland security, weighted by market capitalization. It tracks the SPADE Defense Index, which is designed to capture the companies that develop, manufacture, and support defense and aerospace systems: the large primes that build aircraft, missiles, and military electronics, plus a tail of suppliers, defense-tech firms, and government-services names. At a 0.58% expense ratio, it is a straightforward way to own the whole sector in one fund.

The simplest way to understand PPA is as the broadest of the major defense funds. Where ITA holds a tighter lineup of mostly pure aerospace and defense and XAR weights its holdings equally, PPA is cap-weighted and reaches wider, letting in adjacent aerospace and technology names alongside the core primes. In one purchase you own the large defense contractors and a long tail of smaller companies tied to the same spending, with no need to pick individual names.

Approximate weights as of early 2026; refresh quarterly from Invesco's fund page. Each ticker links to its individual stock guide in Walnut.

Because PPA is cap-weighted, its top holdings are the largest aerospace and defense companies: GE Aerospace and Boeing near the top, followed by the primes RTX, Lockheed Martin, Northrop Grumman, and General Dynamics, plus aerospace and defense-tech names like Axon, Howmet, TransDigm, and L3Harris. See the top-10 table above for current weights. The top 10 account for a little over half the fund, so the big primes carry most of the influence over its returns.

The remaining holdings, roughly 50 more names, fill out the rest of the portfolio. They include smaller defense suppliers, electronics and components makers, and government-services firms that ride the same defense and aerospace spending without being household names. That broader tail is the main reason to choose PPA over a tighter fund like ITA: it captures more of the supply chain and adjacent technology, not just the handful of largest contractors.

All three target the aerospace and defense sector, but they are built differently. PPA (Invesco, 0.58%) is cap-weighted across roughly 60 names and is the broadest, including some adjacent aerospace and technology companies. ITA (iShares) is also cap-weighted but holds a tighter roughly 35-name lineup of mostly pure aerospace and defense, and it is cheaper. XAR (SPDR) is equal-weighted, so every holding carries a similar weight regardless of size, which tilts it toward mid-cap suppliers rather than the big primes.

The practical choice comes down to breadth and weighting. PPA gives the widest sector coverage in one fund and leans on the largest primes. ITA is the cleaner, cheaper pure-defense fund for investors who want only the core contractors. XAR's equal weighting spreads exposure toward smaller suppliers and away from the megacap primes. PPA is the broad cap-weighted pick, ITA the focused one, and XAR the equal-weight one.

PPA's total return comes from price appreciation across its aerospace and defense holdings plus a small dividend that yields roughly 0.5%, paid quarterly, modest because companies in the sector tend to reinvest in long-cycle programs rather than pay large distributions. Its returns are tied closely to defense budgets, government contracts, and the order books of the large primes, so the fund tends to move with the spending and geopolitical cycle rather than with the broad market.

That is the central thing to understand before buying: PPA is a single-sector bet whose fortunes ride on defense and aerospace spending continuing. Holding it means concentrated exposure to government budgets, geopolitics, and a handful of large contractors, with less diversification than a broad-market fund. PPA is best judged against other aerospace and defense funds and the sector's spending backdrop rather than against the S&P 500, since tracking the whole market is not what it is built to do.

PPA is a common way to add a defense and aerospace tilt to a portfolio: one purchase covers the major primes plus a wide tail of suppliers and defense-tech names, and the cap weighting keeps the largest, most established contractors at the top. It suits investors who want broad exposure to the sector in a single position rather than picking individual companies, or who want wider coverage than a tighter fund like ITA provides.

Where it falls short: PPA is a single-sector fund, so it is far more concentrated than a broad-market core and rises and falls with defense spending, government budgets, and a handful of large names. It overlaps heavily with ITA and XAR at the top, so holding more than one defense fund is largely redundant. Walnut isn't an investment adviser and this isn't a recommendation, but in conversation Walnut's AI can show you how much defense and aerospace exposure you already carry and where PPA fits as a sector tilt.

PPA trades on NYSE Arca during US market hours (9:30am to 4:00pm ET) and is available commission-free at every major broker, including Robinhood, Fidelity, Schwab, Public, M1, and Webull. Fractional shares are supported at most modern brokers, which also lets the quarterly dividends reinvest automatically as fractional shares (DRIP), useful for a long-term sector position.

Walnut doesn't replace your broker, it sits on top of it. Connect any major broker and Walnut adds an AI layer that helps you build baskets around PPA, track how your holdings are doing against your targets, and rebalance when your allocation drifts.

PPA is the broadest way to own the aerospace and defense sector in one ticker, roughly 60 US names spanning the big primes plus aerospace and adjacent tech, at a 0.58% fee. It works as a sector tilt toward defense and aerospace for investors who want wider coverage than ITA's pure-defense lineup, rather than as a diversified core holding.

Whether PPA is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is PPA a buy?

PPA yields ~0.5% as of early 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see PPA dividend: yield and schedule.