Aerospace and Defence ETFs
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An aerospace and defence ETF gives you exposure to the companies that build aircraft, weapons systems, space technology, and defence electronics. It is a way to invest in a sector tied to government budgets and long-term security spending.
Which Aerospace & Defence ETFs are gaining or losing popularity on INDmoney?
Based on INDmoney investor activity: Search interest and investment volume.
Top 5 Aerospace & Defence ETFs by Search Interest
INDmoney Data - Jun 28, 2026 to Jul 28, 2026
ETF | Monthly Change |
|---|---|
 Invesco Aerospace & Defense ETF | -16.00% |
 Global X Defense Tech ETF | -38.00% |
 iShares U.S. Aerospace & Defense ETF | -40.00% |
 Direxion Daily Aerospace & Defense Bull 3X ETF | -46.00% |
 State Street SPDR S&P Kensho Future Security ETF | -57.00% |
Top 5 Aerospace & Defence ETFs by Investment Activity
INDmoney Data - Jun 28, 2026 to Jul 28, 2026
ETF | Monthly Change |
|---|---|
Invesco Aerospace & Defense ETF | -1.55% |
iShares U.S. Aerospace & Defense ETF | -20.64% |
 State Street SPDR S&P Aerospace & Defense ETF | -32.92% |
Direxion Daily Aerospace & Defense Bull 3X ETF | -32.96% |
Global X Defense Tech ETF | -38.87% |
What are aerospace and defence ETFs?
Aerospace and defence ETFs are sector funds that hold companies making military and civilian aircraft, defence systems, space technology, and related electronics. They give focused exposure to the defence and aerospace industry in a single trade.
Common examples include the iShares U.S. Aerospace & Defense ETF (ITA), the Invesco Aerospace & Defense ETF (PPA), and the SPDR S&P Aerospace & Defense ETF (XAR), each with a different weighting approach.
How do aerospace and defence ETFs work?
These funds hold a basket of aerospace and defence companies, from large prime contractors to smaller suppliers. The index behind each fund determines the mix and weighting, which shapes how concentrated or diversified the exposure is.
Because a large share of revenue in this sector comes from government contracts, the funds are influenced by defence budgets, geopolitics, and long procurement cycles.
ITA vs PPA vs XAR: How the main defence ETFs differ
The leading aerospace and defence ETFs weight their holdings differently, which changes their character:
- ITA is market-cap weighted, so it leans toward the largest, most established prime contractors, favouring stability and industry leaders.
- PPA takes a broader approach that includes emerging areas such as space technology and cybersecurity, alongside the majors.
- XAR uses an equal-weight method, giving smaller companies a similar weight to the giants, so its performance is less dependent on any single name.
Why do Indian investors consider aerospace and defence ETFs?
Global defence spending has become a prominent long-term theme, and many of the leading aerospace and defence companies are US-listed and not available in India. An ETF lets Indian investors gain diversified exposure to this sector without picking individual contractors.
A US-listed defence ETF provides this exposure in US dollars across the industry rather than through a single company.
How can Indians invest in aerospace and defence ETFs?
- Open a US Stocks account on INDmoney. Digital KYC on app takes under five minutes.
- Add funds in the wallet and search for the ETF by ticker or name.
- Invest in whole or fractional units starting Rs 100.
Benefits of aerospace and defence ETFs
- Exposure to a sector tied to long-term government spending
- Access to leading global defence and aerospace companies
- Diversification across primes, suppliers, and emerging defence tech
- US-dollar-denominated exposure
- A single trade instead of selecting individual contractors
Risks of aerospace and defence ETFs
- Revenue depends heavily on government budgets and procurement decisions
- Sector concentration can mean sharp moves on policy or geopolitical shifts
- Cap-weighted funds can be top-heavy in a few large contractors
- Ethical or ESG considerations may matter to some investors
- Currency risk, and US estate tax exposure for non-US persons above a threshold
How to evaluate an aerospace and defence ETF before investing
- Weighting: Market-cap versus equal-weight, which drives concentration
- Scope: Pure primes versus a mix that includes space and cyber
- Holdings: How much sits in the largest contractors
- Expense ratio: Costs vary across the main funds
- Your view: Stability of established leaders versus broader sector exposure
FAQs on Aerospace & Defence ETFs
It is a sector fund that holds companies making aircraft, weapons systems, space technology, and defence electronics, giving diversified exposure to the aerospace and defence industry in one holding.
ITA is market-cap weighted and leans toward large prime contractors, PPA is broader and includes space and cybersecurity names, and XAR uses equal weighting so smaller companies count as much as the giants.
Yes. Indian residents can buy US-listed aerospace and defence ETFs under the RBI's Liberalised Remittance Scheme through platforms like INDmoney that offer US stock investing.
Rising global defence budgets and ongoing geopolitical tensions have made defence spending a prominent long-term theme, and many leading contractors are US-listed and not available in India.
Yes. Much of the sector's revenue comes from government contracts, so defence budgets, procurement cycles, and geopolitics strongly influence these funds.
Many hold established contractors that pay dividends, so these funds often distribute income, which for Indian investors is subject to US withholding tax and Indian income tax.
Aerospace & defence ETFs listed in the US are treated as foreign capital assets for Indian residents. Here's how they are taxed:
- Sold after 24 months: taxed as long-term capital gains at a flat rate of 12.5% + cess + surcharge (if applicable).
- Sold Within 24 months: Taxed at your income tax slab rate.