The iShares U.S. Aerospace & Defense ETF (ITA) has increased 61% in value over the last year. President Trump's military actions suggest this trend could continue. The White House has discussed using military force to acquire Greenland and maintains control in Venezuela after capturing its leader. These moves are expected to drive higher defense spending.
ITA holds $12 billion in assets with a 0.38% expense ratio. Its top holdings include GE Aerospace at 21.5%, RTX at 16.4%, and Boeing at 8%. Smaller positions in Rocket Lab and Kratos Defense provide exposure to emerging technologies. The fund rose 14.8% in the past month as Trump's territorial ambitions escalated.
On January 7, Trump banned defense contractors from paying dividends and conducting stock buybacks. He accused companies of prioritizing shareholders over production capacity. Trump stated on Truth Social that he "will not permit" such payments until firms build new plants. Defense contractor stocks declined after the announcement.
The $900 billion defense authorization bill passed in December provides baseline funding. Supplemental requests typically follow new military operations. White House press secretary Karoline Leavitt said that "utilizing the U.S. Military is always an option" regarding Greenland acquisition. Trump has framed Greenland as essential for deterring Russian and Chinese activities in the Arctic.
The SPDR S&P Aerospace & Defense ETF (XAR) offers similar exposure with equal-weighted holdings. This reduces concentration risk compared to ITA's market-cap approach. XAR has a 0.35% expense ratio.