First Trust unveils Aerospace & Defense ETF

Nov 1st, 2022 | By | Category: Equities

First Trust has launched a new ETF targeting US-listed stocks of companies operating in the aerospace and defense industry.

First Trust unveils Aerospace & Defense ETF

The fund

The First Trust Indxx Aerospace & Defense ETF (MISL US) has been listed on NYSE Arca with an expense ratio of 0.60%.

Ryan Issakainen, Senior Vice President, ETF Strategist at First Trust, said: “The aerospace and defense industry has been at the forefront of innovation for decades, providing aircraft, ships, spacecraft, weapon systems, and defense equipment to both the government and private enterprises.

“As technological advancements accelerate, we believe there are strong incentives for continued investments to be made in each of these areas, and we are excited to offer MISL as a way to gain exposure to stocks that may benefit from the growth and maturity of this industry.”


The fund is linked to the Indxx US Aerospace & Defense Index which consists of US-listed companies with market capitalizations greater than $500 million and average daily trading volumes above $2m.

Index provider Indxx screens for companies that derive at least half of their revenues from business activities in one or more of the following aerospace and defense sub-themes: hypersonic, directed energy, space technologies, unmanned aerial vehicles, advanced air mobility, autonomous vehicles, cybersecurity, C5ISR systems, and traditional aircraft manufacturing.

The index selects up to 50 of the largest eligible stocks which are weighted by market capitalization subject to a single security cap of 8% and an aggregate cap of 45% on all stocks with individual weights above 5%.

The index is reconstituted semi-annually and rebalanced on a quarterly basis.

As of 28 October, the index contained 33 stocks with the largest positions being Lockheed Martin (8.7%), Northrop Grumman (8.2%), Raytheon Technologies (8.0%), General Dynamics (7.9%), Boeing (7.5%), HEICO (4.1%), Huntington Ingalls Industries (4.0%), Leidos (4.0%), Textron (4.0%), and L3Harris Technologies (4.0%).

The fund joins a crowded field of sizable ETFs providing targeted exposure to the US’s aerospace and defense industry. Its competitors include the $3.9 billion iShares US Aerospace & Defense ETF (ITA US), which comes with an expense ratio of 0.42%; the $1.5bn Invesco Aerospace & Defense ETF (PPA US), which has an expense ratio of 0.58%; and the $1.2bn SPDR S&P Aerospace & Defense ETF (XAR US), which costs 0.35%.

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