ITA vs PPA: iShares vs Invesco Defense ETF
Two of the three major defense ETFs, with different approaches. ITA is the largest and most liquid. PPA's modified market-cap approach spreads exposure more evenly across prime contractors and mid-cap defense suppliers.
ITA (iShares US Aerospace & Defense) is the largest defense ETF at about $12B AUM, holding 35 US aerospace and defense companies with 0.40% expenses. PPA (Invesco Aerospace & Defense) holds 58 companies at 0.58%, using a modified market-cap approach that reduces the concentration in prime contractors like Lockheed Martin and Raytheon. PPA's broader exposure to mid-cap defense suppliers has historically delivered better Sharpe ratios than ITA's more top-heavy portfolio. In 2025-2026, with NATO members accelerating spending toward higher GDP targets and European defense budgets expanding dramatically, both funds have posted strong returns. PPA's returns have held up slightly better because mid-cap defense companies, including suppliers, munitions makers, and electronics firms, have benefited from the spending surge along with the prime contractors. For investors making a long-term defense allocation, PPA's more balanced construction justifies its higher fee.
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
📋 ITA vs PPA — Key Facts Side by Side
| Metric | ITA | PPA |
|---|---|---|
| Fund Name | iShares U.S. Aerospace & Defense ETF | Invesco Aerospace & Defense ETF |
| Issuer | iShares | Invesco |
| Tracks Index | Dow Jones US Select Aerospace & Defense | SPADE Defense Index |
| Expense Ratio | 0.40% ✓ | 0.58% |
| Cost per $10K/yr | $40.00 | $58.00 |
| AUM | $14.4B | $8.3B |
| Holdings | 35 | 58 |
| Inception | 2006 | 2005 |
| 1-Year Return | +23.46% | +20.05% |
| 3-Year Return | +28.28% | +27.93% |
| 5-Year Return | +17.72% | +18.89% |
| Dividend Yield | 0.44% | 0.36% |
| Holdings Overlap | See holdings overlap → | |
| Avg Bid-Ask Spread | 0.03% | 0.04% |
Expense ratio, AUM, and returns updated Jul 14, 2026 from ETF BFF database. Returns are annualised. Not investment advice.
📊 ITA vs PPA — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Which Fund Fits Which Investor?
- want the lowest fees: saves ~$18/yr per $10K vs PPA
- already use iShares and prefer staying within one fund family
- want broader diversification (58 holdings vs 35)
- already use Invesco and prefer staying within one fund family
💰 What the Fee Difference Actually Costs
Adjust the numbers for your situation. This models each fund's expense ratio compounding against your balance over time.
Assumes a constant annual return reinvested, with each fund's expense ratio deducted yearly. Illustrative only; actual returns vary. Past performance does not guarantee future results.
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❓ ITA vs PPA — Frequently Asked Questions
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