Which Aerospace and Defense ETF Is the Better Buy: iShares' ITA or First Trust's MISL?

This is mainly a wrapper-selection story, not a new sector thesis. In the near term, institutional capital tends to migrate toward the deeper, lower-friction vehicle, which should favor the more traditional defense basket and make it the cleaner benchmark for new money. The tech-tilted alternative is effectively adding duration and growth beta to a defense allocation, so it can outperform in momentum/risk-on regimes but will be more vulnerable if real yields back up or AI multiples de-rate.

Over 1-3 months, the key catalyst is whether defense spending turns into booked orders and backlog conversion rather than headline flow. If procurement execution remains slow, the market will reward liquidity and index purity more than thematic storytelling. Over 6-18 months, the bigger second-order effect is that software and autonomy likely capture incremental share of defense budgets, but that should show up in single names rather than a blended ETF.

Contrarian view: consensus may be overestimating how fast budgets shift away from hardware. Engines, maintenance, munitions, and platform sustainment still drive the cash flow pool, which leaves the industrial core better insulated than the market’s "modern warfare = software" narrative implies. The main falsifier is a sustained outperformance of defense tech names alongside falling rates and accelerating contract awards; in that case the tech-tilted basket can widen the gap quickly.