XAR vs PPA: Cost vs Construction in Defense ETFs
XAR is the cheapest major defense ETF. PPA has the longest track record and the broadest exposure, including defense tech suppliers and service companies. The cost gap is significant at 0.23 percentage points per year.
XAR charges 0.35% and equal-weights roughly 34 aerospace and defense companies. PPA charges 0.58% and holds 58 companies using a modified market-cap approach. Both provide broad defense exposure. The question is whether PPA's extra 0.23% per year in expenses is justified. PPA's 58-stock portfolio includes more mid-cap defense suppliers and service companies than XAR, and its modified market-cap weighting has historically produced strong risk-adjusted returns. However, XAR's equal-weight methodology naturally includes similar smaller-company exposure. The 0.23% annual cost gap compounds meaningfully over time. On a $100,000 investment over 20 years, that difference is approximately $50,000 in additional fees at equal returns. XAR delivers comparable defense exposure at a lower cost, making it the better default for long-term defense investors. PPA is worth considering for investors who prefer a longer track record (PPA launched in 2005 vs XAR's 2011) and Invesco's specific construction methodology.
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.
📋 XAR vs PPA — Key Facts Side by Side
| Metric | XAR | PPA |
|---|---|---|
| Fund Name | State Street SPDR S&P Aerospace & Defense ETF | Invesco Aerospace & Defense ETF |
| Issuer | State Street | Invesco |
| Tracks Index | S&P Aerospace & Defense Select Industry Index | SPADE Defense Index |
| Expense Ratio | 0.35% ✓ | 0.58% |
| Cost per $10K/yr | $35.00 | $58.00 |
| AUM | $6.5B | $8.3B |
| Holdings | 34 | 58 |
| Inception | 2011 | 2005 |
| 1-Year Return | +25.63% | +20.05% |
| 3-Year Return | +32.31% | +27.93% |
| 5-Year Return | +16.21% | +18.89% |
| Dividend Yield | 0.28% | 0.36% |
| Holdings Overlap | See holdings overlap → | |
| Avg Bid-Ask Spread | 0.04% | 0.04% |
Expense ratio, AUM, and returns updated Jul 14, 2026 from ETF BFF database. Returns are annualised. Not investment advice.
📊 XAR 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 ~$23/yr per $10K vs PPA
- already use State Street and prefer staying within one fund family
- want broader diversification (58 holdings vs 34)
- 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.
⚙️ Want the Full Interactive Comparison?
Side-by-side holdings overlap, sector breakdown, and live performance tabs, all in one place.
Run Full XAR vs PPA Comparison → Free · No signup · Instant resultsTime sectors better — the weekly ETF BFF breakdown
Cyclicals vs defensives, when to rotate, and what the macro signals are saying — clear and jargon-free.
Free to learn forever · No spam · Unsubscribe anytime
❓ XAR vs PPA — Frequently Asked Questions
New to ETF investing? See answers to the most common ETF questions →