Invesco Aerospace & Defense vs. Global X Defense Tech: Which ETF Is Best for Your Portfolio?
Key Points
Invesco Aerospace & Defense provides broader industrial exposure and a much longer operating history than Global X's fund.
SHLD features a lower expense ratio and a higher trailing-12-month dividend yield.
While the Invesco ETF has shown stronger one-year total returns, Global X's fund maintains a more concentrated tech-heavy portfolio.
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 often stays resilient throughout various economic cycles, making aerospace and defense exchange-traded funds a popular choice for investors seeking sector-specific growth. While both funds target the same broad industry, they differ in their approach to legacy hardware versus emerging technologies and software-defined systems. This comparison looks at how the veteran PPA stacks up against the newer SHLD.
Snapshot (cost & size)
| Metric | SHLD | PPA |
|---|---|---|
| Issuer | Global X | Invesco |
| Share price (as of Sept. 10, 2026) | $61.78 | $160.68 |
| Expense ratio | 0.5% | 0.58% |
| 1-year return (as of Sept. 10, 2026) | (2.5%) | 8.5% |
| Dividend yield | 0.7% | 0.4% |
| Beta | 0.32 | 0.75 |
| AUM | $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%. Additionally, the Global X fund provides a higher payout, with a 0.7% yield compared to the 0.4% offered by the Invesco fund.
Performance & risk comparison
| Metric | SHLD | PPA |
|---|---|---|
| Max 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 higher technology tilt than SHLD at 15%. 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.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy?
There is not a ton of daylight between these two ETFs. Indeed, they share five companies among their top 10 holdings. Assets under management are pretty close, expense ratios are just a few basis points off, and they both have relatively narrow portfolios. The difference in one-year returns is not significant (to me, anyway).
SHLD has a higher dividend yield, but has also experienced a greater maximum drawdown, which may make it less attractive to more conservative investors.
I think investors looking for diversified exposure to the defense industry would probably 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's probably an advantage. I cannot picture a universe where defense spending by the U.S. government 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.
Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing, GE Aerospace, Palantir Technologies, and RTX. The Motley Fool has a disclosure policy.