Although President Trump is the first 2-term POTUS since Eisenhower to not involve the US in any wars, he is the first one to have successfully ended 8 international wars, with some of them having lasted decades. What is most impressive about the ending of these wars is that they were done without active US military involvement and with no US military personnel casualties.
However, what many critics are reluctant to admit is that the reason for Trump’s persuasive abilities are his demonstrations of US military power conducted in strategically decisive ways that have again avoided US casualties. The contrast with the boondoggle money pits of the Biden Administration are stark:
- Ukraine (unaccounted for $83 billion+)
- Afghanistan ($7.1 billion in equipment foolishly abandoned)
- $2.1 billion that has gone to Palestine since 2021
- $21.7 billion+ that has gone into Gaza since October 7th, are stark.
Thanks to the identification of hundreds of billions of wasted taxpayer money in USAID and other agencies identified by DOGE, Secretary of War Pete Hegseth has made a strong case for US military upgrades in order to maintain the intimidation factor of the Trump Doctrine.
The demonstrations of US military power ordered by President Trump, such as the destruction of Iran’s nuclear weapons in June, have already boosted aerospace and defense companies for 2025, and 2026 should see substantial new contract bid opportunities. Therefore, aerospace and defense ETFs may be worth watching starting in January. Three of the ones to consider are:
- iShares US Aerospace and Defense ETF (CBOE: ITA) – +52.68% YTD
- GlobalX Defense Tech ETF (NYSE: SHLD) – +78.39% YTD
- State Street SPDR S&P Aerospace and Defense ETF (NYSE: XAR) – +51.78%
iShares US Aerospace and Defense ETF
Patriot Missiles are supplied to the US Department of War from RTX’s Raytheon division.
Using the Dow Jones US Select Aerospace & Defense Index as its benchmark, ITA covers a cross section of the top US companies involved with designing, manufacturing, and selling military aircraft, sea vessels, land transport, missiles, and the associated electronics and other support to make them operate at maximum efficiency. Launched May 1, 2006, up to 20% of its assets may be allocated to certain futures, options and swap contracts. A $10,000 investment in ITA in 2015 would be worth $42,064 today. It has a 4-star Morningstar rating. Based on market price at the time of this writing, an overview of details includes:
|
YTD Return |
52.68% |
NAV |
$218.10 |
|
Net Assets |
$13.03 billion |
Expense Ratio |
0.38% |
|
Yield |
0.79% |
1-year Return |
41.14% |
|
Average Volume |
553,841 shares |
3-Year Return |
33.15% |
|
# of stocks held |
41 |
5-Year Return |
22.58% |
|
Beta |
1.00 |
10-Year Return |
15.62% |
The top 10 stocks held by IRA are:
- GE Aerospace: 21.55%
- RTX Corp:16.12%
- Boeing: 8.03%
- Howmet Aerospace: 4.60%
- Northrop Grumman: 4.37%
- L3Harris Technologies: 4.35%
- Lockheed Martin: 4.33%
- Axon Enterprise: 4.21%
- General Dynamics: 4.21%
- Transdigm Group: 4.21%
GlobalX Defense Tech ETF
Palantir’s big data technology is crucial to US military superiority and is SHLD’s largest stock position.
The utilization of AI, big data, and cybersecurity technology in military warfare and equipment is cutting edge and often proprietary, being subject to ITAR (International Trafficking in Arms Regulations). SHLD is an ETF that focuses more on the stocks that GlobalX analysts have determined have the best cyber-related technology upside prospects for the aerospace and defense sector. Therefore, the GlobalX Defense Tech Index is its benchmark. As SHLD was launched, ominously, on 9-11 in 2023, its operating history is comparatively brief, but its stock target emphasis is very pertinent going forward into 2026. That emphasis on defense companies means that those with significant commercial aviation or other non-defense sector businesses are omitted from its benchmark index. It has a “neutral” Morningstar rating, due to its short history. Its details include:
|
YTD Return |
78.39% |
NAV |
$65.75 |
|
Net Assets |
$5.12 billion |
Expense Ratio |
0.50% |
|
Yield |
0.41% |
1-year Return |
89.74% |
|
Average Volume |
965,747 shares |
3-Year Return |
N/A |
|
# of stocks held |
49 |
5-Year Return |
N/A |
|
Beta |
0.0% |
10-Year Return |
N/A |
The top 10 holding of SHLD are:
- Palantir: 8.78%
- RTX Corp: 8.26%
- Lockheed Martin: 7.93%
- General Dynamics: 7.81%
- Rheinmetall AG: 7.11%
- L3Harris Technologies: 4.56%
- Northop Grumman: 4.46%
- BAE Systems: 4.27%
- Thales SA: 4.25%
- Leidos Holdings: 4.15%
State Street SPDR S&P Aerospace and Defense ETF
Rocket Lab launch technology is crucial for both missile and spacecraft deployment.
The S&P Aerospace and Defense Select Industry Index is the benchmark for XAR. An ETF launched on September 28, 2011, XAR has a 5-star Morningstar rating. A $10,000 investment in XAR made in 2015 would be worth $50,303 today. Based on market price at the time of this writing, an overview of details includes:
|
YTD Return |
51.78% |
NAV |
$250.07 |
|
Net Assets |
$4.85 billion |
Expense Ratio |
0.35% |
|
Yield |
0.61% |
1-year Return |
31.61% |
|
Average Volume |
145,403 shares |
3-Year Return |
28.61% |
|
# of stocks held |
40 |
5-Year Return |
17.38% |
|
Beta |
1.29 |
10-Year Return |
16.56% |
The top 10 XAR holdings are:
- Rocket Lab Corp: 4.33%
- Karman Holdings: 3.88%
- General Electric: 3.61%
- ATI Inc.: 3.60%
- Howmet Aerospace: 3.56%
- Huntington Ingalls: 3.55%
- Carpenter Technology: 3.55%
- Boeing: 3.55%
- Heico Corp.: 3.54%
- Woodward, Inc.: 3.49%
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