Powershares Aerospace & Defense #ETF (NYSEarca: $PPA) Joins Billion Dollar ETF Club
Washington, DC - February 27, 2018 (Investorideas.com Newswire) The Powershares Aerospace & Defense ETF (NYSEarca: PPA) has joined the exclusive ETF club of funds with more than $1 billion of assets under management. Launched in 2005, the ETF fund tracks the SPADE Defense Index (ticker: DXS)—a passive investment benchmark composed of more than 50 firms deemed systematically important to the defense sector and includes companies involved with the manufacture of aircraft, naval vessels, missiles, anti-missile systems, and ground vehicles; information technology including command and control, reconnaissance, surveillance, big data, and cybersecurity; space systems; and border and national security efforts.
The SPADE Defense Index has outperformed the S&P500 in each of the last 6 years and in 15 of the past 18. Since the turn of the century, the Index has increased by 584.57% vs just 87% for the broader market. This translates to a $10,000 investment in a fund tracking the SPADE Defense Index (compounded before fees) being worth $63,560 at the beginning of 2018 vs. $18,193 for one tracking the broader US market.
Fueling these recent gains, which have seen assets into PPA quadruple over the past two years, is a convergence of an upgrade supercycle for commercial airplanes, strength in defense spending, and an increase in international/foreign military sales. Boeing (NYSE: GD) alone has seen its stock price triple in the past 20 months.
According to SPADE Indexes, the sector remains in a position to see sustained growth as each of these three trends are expected to continue for some time. The recent planned acquisition by General Dynamics (NYSE: GD) of CSRA, the former public sector division of CSC that merged with SRA, indicates that IT-related activities which have underperformed in recent years may be returning to favor. This should benefit to investors in PPA as the SPADE Defense Index includes exposure in this area and has the most diversified market cap holdings in the category.
The SPADE® Defense Index (NYSE: ^DXS) is a modified capitalization-weighted index comprised of publicly traded companies that benchmarks the performance of companies involved with defense, homeland security, and space. The Index is composed of more than 50 firms with representative business activities including: naval vessels, military aircraft, missiles and munitions, battlespace awareness, C4ISR, network centric warfare, homeland security including border security and biometric and screening systems, and space systems.
Index values are distributed by the NYSE/ICE Data Services under the ticker 'DXS'. The InvescoPowershares Aerospace & Defense ETF, designed to track the SPADE Defense Index, trades under the ticker 'PPA'. Historical data for the Index is available from 30 December 1997. The ETF was launched on 26 October 2005.
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