The SPDR S&P Aerospace & Defense ETF (XAR), a smart beta fund with over $4.11 billion in assets under management, offers concentrated exposure to the aerospace and defense sub-industry through a modified equal-weight index, featuring a competitive 0.35% expense ratio. The ETF has demonstrated strong performance, gaining approximately 35% year-to-date and 46.83% over the past year (as of 09/16/2025), while maintaining a medium-risk profile with a beta of 1.12 and 39 holdings. This positions XAR as a notable option for investors seeking targeted exposure and potential outperformance within the Industrials sector.
The SPDR S&P Aerospace & Defense ETF (XAR) presents as a strong-performing, smart beta vehicle offering targeted exposure to the U.S. aerospace and defense industry. With assets over $4.11 billion, the fund utilizes a modified equal-weight indexing strategy, distinguishing it from traditional market-cap weighted peers and providing more balanced exposure across its 39 holdings. This concentration is notable, with the top 10 holdings constituting 40.56% of the portfolio. The fund's performance has been robust, delivering a 35% gain year-to-date and a 46.83% return over the last year as of September 16, 2025. This performance is coupled with a medium-risk profile, evidenced by a beta of 1.12 and a three-year standard deviation of 20.59%. From a cost perspective, XAR is competitively positioned with an annual expense ratio of 0.35%, which is lower than that of alternatives like the Invesco Aerospace & Defense ETF (PPA) at 0.57% and slightly below the iShares U.S. Aerospace & Defense ETF (ITA) at 0.38%. The trailing 12-month dividend yield stands at a modest 0.49%, indicating the fund is primarily oriented towards capital appreciation rather than income generation.
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strongly positive
Sentiment Score
0.75
Ticker Sentiment
