PPA ETF Rallies Toward $180 On $1.5T US Defense-Spending Supercycle

NASDAQ:PPA: Defense-Spending Supercycle Drives ETF Toward New Highs

Macro Tailwinds And The Case For NASDAQ:PPA Above $175

NASDAQ:PPA trades in the high-$170s, recently around $175–$180 per share after a 36% price gain in 2025 and another roughly 15% move year to date in 2026, vastly outpacing the S&P 500’s 16% advance last year and positioning the ETF as one of the cleanest liquid plays on a defense-spending supercycle. The key catalyst is policy, not hope: President Trump has already floated a 2027 U.S. defense budget of $1.5 trillion versus an approved $901 billion for 2026, effectively signaling an incremental ~$600 billion annualized demand wave for weapons systems, aerospace platforms and space programs. That proposal lands on top of active operations: U.S. strikes in Iran aimed at its nuclear infrastructure, attacks in Venezuela including capture of the President and his wife, and retaliatory missions in Syria, plus talk of deploying force in the war on drugs in Venezuela and possibly Mexico. Add ambitions such as “Trump Class” battleships, an Israel-style Iron Dome and intensified backing for the Artemis space program, and you have a policy stance that hard-codes multi-year order visibility for the exact names that dominate PPA ETF.

Price Momentum Of PPA ETF Versus S&P 500 And Sector Peers

From a pure performance lens, PPA ETF has shifted from a quiet compounder into an aggressive momentum vehicle. A $10,000 allocation ten years ago with dividends reinvested would now sit near $50,790, versus about $36,180 in SPDR S&P 500 (SPY), meaning NASDAQ:PPA has generated roughly 40% more total return than the index over the decade. The last three calendar years show an accelerating slope: price returns of about 18% in 2023, 24% in 2024 and 36% in 2025 as geopolitical tension and rearmament budgets ramped. Over the last five years, the fund is up roughly 162.7%, nearly a 2.6x on capital, and it beat its closest aerospace-and-defense peers with price appreciation of about 159.1% compared with ~154% for ITA, ~146.4% for XAR and significantly more muted gains from smaller vehicles. A year like 2025, where PPA ETF outperformed the S&P 500 by roughly 20 percentage points, is not a statistical outlier; it’s consistent with the structural leverage of a sector whose revenue line is increasingly tied to national-security budgets rather than consumer cycles.

Portfolio Structure: How NASDAQ:PPA Concentrates US Defense And Space Power

The fund tracks the SPADE Defense Index and keeps at least 90% of assets in index constituents, but the construction is far from a naive equal-weight basket. PPA ETF holds around 62 names, with the top 10 accounting for about 59.4% of assets, creating a deliberate overweight to large primes and critical suppliers whose contracts span administrations. Boeing (BA), RTX Corporation (RTX), Lockheed Martin (LMT), General Electric (GE) and Northrop Grumman (NOC) sit at the top, followed by General Dynamics (GD), L3Harris (LHX), Honeywell (HON), Howmet Aerospace (HWM) and Parker-Hannifin (PH). These are not speculative prototypes; they are entrenched vendors in jet engines, fighter aircraft, missiles, naval platforms, C4ISR systems, space hardware and mission-critical components. The portfolio’s low turnover, the lowest among major peers despite the best price performance, tells you the index committee and Invesco are not constantly trading fashions. They are effectively warehousing long-duration cash flows from U.S. and allied defense budgets, while rebalancing quarterly to keep exposure aligned with the evolving industrial base.

Backlog And Earnings Data Behind PPA ETF Top Holdings

The core of the bull case is not just rhetoric but tangible backlogs and profit trends. Boeing’s stock has climbed about 46% over the last twelve months and roughly 14% year to date as its total backlog reached around $636 billion, giving line-of-sight on years of aircraft deliveries to both commercial carriers such as Delta, which recently ordered 60 additional 787 Dreamliners, and military clients upgrading fleets and transport capacity. RTX delivered approximately 12% sales growth in its latest quarter, with adjusted EPS up 17% year over year and a $251 billion backlog, up about 13%, reflecting multi-year programs in missiles, radar, avionics and civil aerospace. Lockheed Martin, a key PPA ETF pillar through the F-35 Lightning II and other classified platforms, is sitting on a record backlog near $179 billion, which management explicitly equates to more than two and a half years of current sales and is investing in capacity expansions to prevent this orderbook from becoming a bottleneck. General Dynamics reported revenue growth of around 10.6% and EPS growth of 15.8% in its latest quarter, with its total estimated contract value pushing roughly $167.7 billion, while Howmet posted approximately 14% revenue growth and 17% earnings growth on rising airframe and engine components demand. When you aggregate these names inside NASDAQ:PPA, you’re effectively buying a multi-hundred-billion-dollar backlog that stretches well beyond the 2027 budget horizon, not a one-off trade on a headline.

Dividend Durability And Cash-Return Profile Of PPA ETF

Although PPA ETF is marketed primarily as a growth and capital-appreciation tool, the underlying cash-return profile is not trivial. Nearly all of the top-10 holdings except Boeing pay dividends, with average dividend growth across those payers running in the high single digits, around 7% per year over the last five years, and many of them boasting more than 25 consecutive years of distributions. That pattern matters because it tells you these firms are generating excess cash even after funding R&D, capex and workforce expansions needed to build out missile lines, fighter production and space systems. PPA itself has raised its distribution for at least the last two years, with expectations of another sizable step-up in 2026 as portfolio earnings climb. The headline expense ratio of about 0.58% is somewhat higher than the ETF median near 0.50%, but when netted against a five-year 162.7% price gain and robust dividend progress, the fee drag is marginal relative to what investors are being paid in return.

Liquidity, AUM Scale And Trading Dynamics Of NASDAQ:PPA

From a market-microstructure standpoint, PPA ETF is now firmly in institutional territory. Assets under management sit around $8 billion, and average daily trading volume is roughly 200,000 shares, compared with a median of about 37,000 for the broader ETF universe. That liquidity profile means it can absorb block trades and tactical rotations from asset managers who want to move tens of millions of dollars into or out of defense exposure without significantly gapping the price, which in turn pulls in more institutional capital and tightens bid-ask spreads. Combined with the low turnover in holdings, this creates a vehicle that is both easy to trade in the short term and aligned with buy-and-hold behavior over multi-year horizons.

Comparison Of PPA ETF With ITA, XAR, ROKT And SHLD

Within the aerospace-and-defense ETF set, NASDAQ:PPA sits in a nuanced position. iShares US Aerospace & Defense (ITA) is the largest by AUM and runs a more concentrated book, with roughly 75.3% of its assets in the top 10 names and about 46 holdings in total. ITA has delivered approximately 154% price appreciation over five years, just behind PPA’s 159.1% in some datasets and below PPA’s 162.7% in others, illustrating how PPA ETF has squeezed out incremental alpha despite being about half ITA’s size. XAR, which also focuses on U.S. aerospace and defense via a 41-stock portfolio, has produced strong multi-year returns but trails with about 146.4% five-year price growth and more volatility because of its weighting scheme. ROKT, the SPDR Kensho Final Frontiers ETF, is tiny at around $49.6 million in assets but demonstrates how correctly selected small defense and space names can produce outsized but more erratic gains; its small scale, however, makes it unsuitable as a core institutional proxy. More recently, Global X Defense Tech ETF (SHLD) has delivered nearly 100% in twelve-month price performance as a purer play on defense technology, but that narrow focus comes at the cost of broader diversification. PPA ETF effectively sits between these: broad enough at 62 holdings to diversify program-specific risk, concentrated enough in top primes to capture the sector’s full upside, and liquid enough to anchor institutional allocations.

Geopolitics, Global Defense Budgets And Demand Visibility For NASDAQ:PPA

The macro backdrop justifies the premium investors are attaching to PPA ETF. The U.S. is not the only nation re-arming; it is simply the anchor client with a proposed $1.5 trillion 2027 budget. Europe is steadily working toward defense spending of up to 5% of GDP in some countries, off a low base that leaves years of incremental procurement to go. In the Middle East, tensions between Israel and its neighbors, plus stress between Saudi Arabia and the UAE, underpin demand for missile defense, drones and air platforms. The Russia–Ukraine conflict continues to consume artillery, armor and air defense assets at a pace that forces NATO partners to refill stockpiles. In the Asia-Pacific, the U.S.–China rivalry over Taiwan and sea-lane control, together with North Korea’s missile testing and broader Indo-Pacific security concerns, pushes allies to accelerate purchases of fighters, submarines and integrated command-and-control systems. Every one of those segments feeds directly or indirectly into the revenue lines of BA, RTX, LMT, GE, NOC, GD, LHX, HON, HWM and PH, which collectively dominate NASDAQ:PPA. When you aggregate U.S. policy with these global dynamics, you get a multi-regional, multi-year capex cycle rather than a single theater of war that can switch off with one peace deal.

Space, Missiles And Technology Upgrades Inside PPA ETF Holdings

Beyond conventional ground and air platforms, PPA ETF is levered to two structural themes that are independent of short-term headlines: the militarization of space and the shift from manpower to precision technology. The Artemis program and U.S. Space Force initiatives demand launch vehicles, satellite buses, propulsion systems and space-qualified electronics, segments where GE Aerospace, RTX, Northrop Grumman and Honeywell are deeply embedded. At the same time, modern conflict increasingly depends on unmanned systems, stand-off missiles, hypersonic weapons and integrated ISR networks. L3Harris’ investments in solid-rocket motor capacity, RTX’s missile lines and Lockheed’s advanced fighters and missile defense platforms all sit squarely in this pivot. These are long-cycle programs with R&D amortized over decades, which supports durable margins and creates high barriers to entry. Through NASDAQ:PPA, investors are effectively buying sustained exposure to these technological moats without having to pick individual winners.

Risk Profile: Policy Reversal, Tariffs And Macro Shocks For PPA ETF

The risk set is real and cannot be hand-waved away. The primary vulnerability for PPA ETF is a sudden reversal in U.S. defense policy; the same President who now advocates a $1.5 trillion budget has previously entertained deficit-reduction and spending-cut narratives. If adversaries de-escalate and negotiations replace kinetic operations, political pressure could shift toward trimming defense outlays, which would eventually filter into fewer new contracts and slower backlog growth. Tariff and regulatory risks are also non-trivial. As the U.S. is the largest exporter of aerospace and defense products, a deepening trade war—such as the current tariff brinkmanship with Europe over unrelated issues—can trigger retaliatory measures that complicate cross-border sales or raise input costs on imported components. Macroeconomic shocks, including a sharp global recession, could force some allies to delay procurement or renegotiate terms, though historically defense has proven more resilient than discretionary sectors. For NASDAQ:PPA, these risks translate into multiple compression from elevated levels and potential underperformance versus the S&P 500 in a benign-geopolitics, austerity-driven world.

Buy, Sell Or Hold Verdict On NASDAQ:PPA At ~$175–$180

Weighing the numbers, PPA ETF at roughly $175–$180 per share represents a levered claim on a sector with a ten-year track record of turning $10,000 into over $50,000, a five-year price gain above 160%, an $8 billion asset base, about 62 holdings with roughly 59% in the top ten names, backlogs like Boeing’s $636 billion, RTX’s $251 billion and Lockheed’s $179 billion, and a policy environment targeting a jump from $901 billion to $1.5 trillion in U.S. defense outlays by 2027. Against that, you have political optionality, tariff noise and macro risk that could compress multiples but are unlikely to erase record orderbooks overnight. On balance, the data still point to NASDAQ:PPA as a Buy for investors who want direct participation in multi-year defense and space spending, accept sector-specific volatility and are comfortable owning an ETF whose fortunes are explicitly tied to continued geopolitical tension and national-security priorities.

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