PPA vs. SHLD: Comparing Two Defense ETFs for Sector Investors

Key Points

Invesco Aerospace & Defense ETF (NYSEMKT:PPA) offers a long track record and broad industrial exposure, while Global X Defense Tech ETF (NYSEMKT:SHLD) provides a lower-cost, technology-focused approach to the defense sector.

Defense spending tends to remain resilient across various economic cycles, making aerospace and defense exchange-traded funds an attractive option for investors pursuing sector-specific growth. Although both funds target the same broad industry, they differ in their emphasis on legacy hardware versus emerging technologies and software-defined systems. This analysis examines how the established PPA compares with the newer SHLD.

Snapshot (Cost & Size)

MetricSHLDPPAIssuerGlobal XInvescoShare price (as of Sept. 10, 2026)$61.78$160.68Expense ratio0.5%0.58%1-year return (as of Sept. 10, 2026)(2.5%)8.5%Dividend yield0.7%0.4%Beta0.320.75AUM$6.8 billion$7.7 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

With an expense ratio of 0.5%, the Global X fund is slightly more affordable than the Invesco fund, which charges 0.58%. The Global X fund also offers a higher payout, with a 0.7% yield compared to the Invesco fund’s 0.4%.

Performance & Risk Comparison

MetricSHLDPPAMax drawdown (2 year)(25.4%)(15.2%)Growth of $1,000 over 2 years (total return)$1,721$1,480

What’s Inside

The Invesco Aerospace & Defense ETF provides exposure to 62 companies involved in the development, manufacture, and support of military and government space operations. The fund is non-diversified and heavily weighted toward industrials at 87%, with 11% in technology and 2% in basic materials. Its largest positions include RTX (NYSE:RTX) at 8.29%, Boeing (NYSE:BA) at 7.05%, and GE Aerospace (NYSE:GE) at 6.94%. It was launched in 2005. PPA has paid out $0.64 per share over the trailing 12 months.

The Global X Defense Tech ETF tracks the Global X Defense Tech Index, focusing on 50 companies involved in cybersecurity, artificial intelligence, and software-defined defense systems. The portfolio is dominated by industrials at 85% but features a technology allocation of 15%, giving it a comparatively higher tech tilt. Top holdings include Palantir Technologies (NASDAQ:PLTR) at 10.16%, RTX at 9.39%, and General Dynamics (NYSE:GD) at 8.66%. It was launched in 2023. The Global X fund has paid $0.42 per share over the trailing 12 months.

Which Looks Like the Better Buy?

The differences between these two ETFs are relatively modest. Indeed, they share five companies among their top 10 holdings. Assets under management are similar, expense ratios differ by only a few basis points, and both maintain comparatively narrow portfolios. The gap in one-year returns is not significant.

SHLD offers a higher dividend yield, but it has also experienced a greater maximum drawdown, which may make it less appealing to more conservative investors.

Investors seeking diversified exposure to the defense industry would likely be well served by either SHLD or PPA. Many of the companies in their portfolios rely on the U.S. government for a significant portion of their revenue, and the cynic (realist?) in me thinks that is probably an advantage. It is difficult to envision a scenario in which U.S. defense spending decreases over time. In fact, since 1960, the defense budget has increased nearly every year, and in 2026, it is poised to cross the $1 trillion mark. If defense exposure is what you want, either ETF will work.

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