Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

Aerospace & Defense ETFs In Focus On China, U.S. Budget

Mon, Feb 1, 10:36 AM ET, by Michael Johnston

After staging an impressive recovery in 2009 to claw back significant losses incurred during the recent recession, the aerospace and defense sector has hit a few speed bumps early in 2010, as potentially negative developments both home and abroad threaten to sap demand.

“Gross Intervention” In China

Last week, China announced the suspension of military exchanges with the U.S. as a response to a $6.4 billion sale of weapons to Taiwan. In addition to threatening to destabilize relations between the two superpowers, the move could also harm U.S. industry. Calling the arms sale “a gross intervention into China’s internal affairs,” China will also impose sanctions on U.S. companies involved in the sale.

In accordance with the Taiwan Relations Act, the U.S. is obligated to provide Taiwan with “arms of a defensive character,” but similar actions in the past have enraged China, which claims Taiwan as part of its territory. It remains unclear how many U.S. companies could be sanctioned or how severe the impact of such sanctions could be. After a separate arms sale to Taiwan in 2008, China suspended military exchanges for about six months.

Cuts At NASA

As expected, President Obama’s budget released on Monday included proposals to save about $250 billion by imposing a three-year freeze on discretionary spending starting in 2011. The budget identifies 120 federal programs to curb, including NASA’s Constellation project aimed at returning an American to the moon by 2020 and building a manned base there. While Obama is proposing modest increases to NASA’s nearly $20 billion budget, the extra $1 billion per year isn’t nearly enough to keep the Constellation program going. It is likely that the new rockets will be scrapped, even though $9 billion has already been spent on their development.

The ultimate impact of the budget freeze isn’t immediately clear. While a reduced budget for NASA is obviously a negative development for companies that do business with the agency, the announcement did come with a silver lining. The administration announced incentives for private companies to develop commercial rockets capable of flying astronauts to the International Space Station in low-Earth orbit.

Aerospace & Defense ETFs In Focus

For investors looking to make a play on the aerospace and defense sector, there are a couple of ETF options available. While both of these funds are perhaps more sensitive to demand for commercial aircraft from the global transportation industry, several component companies will likely see their operations impacted by the recent developments discussed above as well.

  • iShares Dow Jones U.S. Aerospace & Defense Index Fund (ITA): This ETF is linked to an index that measures the performance of aerospace companies (including manufacturers and assemblers of aircraft and aircraft parts) and defense stocks (producers of components and equipment for the defense industry). ITA has about 32 holdings, including Boeing, Lockheed Martin, and Northrop Grumman, and charges an expense ratio of 0.48%.

ITA

  • PowerShares Aerospace & Defense Portfolio (PPA): Based on the SPADE Defense Index, this ETF has significant overlap in holdings with ITA, including many of the top ten holdings. PPA offers much more depth of holdings (about 57 component stocks) with a slightly higher price tag (expense ratio of 0.60%).

PPA

For more actionable ETF investment ideas, sign up for our free ETF newsletter.

Disclosure: No positions at time of writing.


SDI Glossary: "Call" Definition
SDI Glossary: "price" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "iShares" Definition
SDI Glossary: "TA" Definition
This Article's Word Cloud:   Aerospace   After   China   Defense   NASA   Obama   Taiwan   While   about   adsbygoogle   aerospace   aircraft   also   announced   arms   billion   both   budget   commercial   companies   component   could   defense   demand   development   developments   exchanges   freeze   holdings   impact   including   industry   many   military   more   nearly   negative   ratio   recent   rockets   sale   sanctions   sector   significant   stocks   that   there   will   with   year

| More

ENZL Crosses Critical Technical Indicator
Fri, Sep 4, 3:54 PM ET, by ETF Channel

In trading on Friday, shares of the iShares MSCI New Zealand Capped ETF (ENZL) entered ...

EDIV Crowded With Sellers
Fri, Sep 4, 3:54 PM ET, by ETF Channel

In trading on Friday, shares of the SPDR S&P Emerging Markets Dividend ETF (EDIV) entered ...

Tractor Supply Moves Up In Analyst Rankings, Passing Delphi Automotive
Fri, Sep 4, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

XLP, MO, WBA, COST: ETF Inflow Alert
Fri, Sep 4, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLP, MO, WBA, COST Exchange traded funds (ETFs) trade just ...

VDE, SLB, COP, OXY: Large Inflows Detected at ETF
Fri, Sep 4, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VDE, SLB, COP, OXY Exchange traded funds (ETFs) trade just ...

IJH, HOLX, WAB, LKQ: Large Inflows Detected at ETF
Fri, Sep 4, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IJH, HOLX, WAB, LKQ Exchange traded funds (ETFs) trade just ...

SCO: ETF Inflow Alert
Fri, Sep 4, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: SCO Exchange traded funds (ETFs) trade just like stocks, but ...

COP Named A Top Socially Responsible Dividend Stock
Fri, Sep 4, 9:54 AM ET, by ETF Channel

ConocoPhillips (COP) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, signifying ...

Capital One Financial Corp Achieves #94 Analyst Rank, Surpassing Electronic Arts
Thu, Sep 3, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

MDY, CHD, ALK, JAH: Large Outflows Detected at ETF
Thu, Sep 3, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: MDY, CHD, ALK, JAH Exchange traded funds (ETFs) trade just ...

IWB, PG, PM, UNH: Large Outflows Detected at ETF
Thu, Sep 3, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWB, PG, PM, UNH Exchange traded funds (ETFs) trade just ...

IVE, XOM, CVX, WMT: Large Inflows Detected at ETF
Thu, Sep 3, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IVE, XOM, CVX, WMT Exchange traded funds (ETFs) trade just ...

IWF, DIS, KO, CVS: Large Outflows Detected at ETF
Thu, Sep 3, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IWF, DIS, KO, CVS Exchange traded funds (ETFs) trade just ...

XLF, COF, BLK, PRU: ETF Inflow Alert
Thu, Sep 3, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: XLF, COF, BLK, PRU Exchange traded funds (ETFs) trade just ...

PKW, FOXA, ORLY, DG: Large Outflows Detected at ETF
Thu, Sep 3, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: PKW, FOXA, ORLY, DG Exchange traded funds (ETFs) trade just ...

FXD, SKX, CVC, FL: Large Outflows Detected at ETF
Thu, Sep 3, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: FXD, SKX, CVC, FL Exchange traded funds (ETFs) trade just ...

FXO, VNTV, PRE, TSS: Large Outflows Detected at ETF
Thu, Sep 3, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: FXO, VNTV, PRE, TSS Exchange traded funds (ETFs) trade just ...

IWR, CCI, AON, MHFI: Large Inflows Detected at ETF
Wed, Sep 2, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWR, CCI, AON, MHFI Exchange traded funds (ETFs) trade just ...

DXJ: ETF Outflow Alert
Wed, Sep 2, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: DXJ Exchange traded funds (ETFs) trade just like stocks, but ...

TZA: ETF Outflow Alert
Wed, Sep 2, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: TZA Exchange traded funds (ETFs) trade just like stocks, but ...

XLI, BA, HON, UNP: ETF Outflow Alert
Wed, Sep 2, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLI, BA, HON, UNP Exchange traded funds (ETFs) trade just ...

CIU: Large Outflows Detected at ETF
Wed, Sep 2, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: CIU Exchange traded funds (ETFs) trade just like stocks, but ...

Why AFLAC is a Top Socially Responsible Dividend Stock (AFL)
Wed, Sep 2, 8:24 AM ET, by ETF Channel

AFLAC Inc. (AFL) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

GXC Crosses Critical Technical Indicator
Tue, Sep 1, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR S&P China ETF (GXC) entered into oversold ...

Shares of FXI Now Oversold
Tue, Sep 1, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares China Large-Cap ETF (FXI) entered into oversold ...

International SmallCap Values (DLS) Enters Oversold Territory
Tue, Sep 1, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the International SmallCap Values ETF (DLS) entered into oversold ...

Raytheon Takes Over #91 Spot From Stericycle
Tue, Sep 1, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

Shares of VGK Now Oversold
Tue, Sep 1, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the Vanguard FTSE Europe ETF (VGK) entered into oversold ...

IEV Crosses Critical Technical Indicator
Tue, Sep 1, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Europe ETF (IEV) entered into oversold territory, ...

Shares of IEUR Now Oversold
Tue, Sep 1, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Core MSCI Europe ETF (IEUR) entered into ...

EWU Crosses Critical Technical Indicator
Tue, Sep 1, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the iShares MSCI United Kingdom ETF (EWU) entered into ...

KRE, NPBC, GWB, STL: Large Outflows Detected at ETF
Tue, Sep 1, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: KRE, NPBC, GWB, STL Exchange traded funds (ETFs) trade just ...

EMLC Crosses Critical Technical Indicator
Tue, Sep 1, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the Emerging Markets Local Currency Bond ETF (EMLC) entered ...

10.5% of XLG Holdings Seeing Recent Insider Buys
Tue, Sep 1, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Guggenheim Russell Top 50 Mega Cap ...

ProShares Ultra 7-10 Year Treasury (UST) Shares Cross Below 200 DMA
Mon, Aug 31, 3:54 PM ET, by ETF Channel

In trading on Monday, shares of the ProShares Ultra 7-10 Year Treasury ETF (UST) crossed ...

Interpublic Group of Companies Takes Over #86 Spot From Navient
Mon, Aug 31, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

iShares J.P. Morgan USD Emerging Markets Bond ETF Experiences Big Outflow
Mon, Aug 31, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: EMB Exchange traded funds (ETFs) trade just like stocks, but ...

EWZ: ETF Outflow Alert
Mon, Aug 31, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: EWZ Exchange traded funds (ETFs) trade just like stocks, but ...

IWN, ISBC, BEE, HIW: ETF Inflow Alert
Mon, Aug 31, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWN, ISBC, BEE, HIW Exchange traded funds (ETFs) trade just ...

VPU, NEP, UTL, CTWS: Large Outflows Detected at ETF
Mon, Aug 31, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VPU, NEP, UTL, CTWS Exchange traded funds (ETFs) trade just ...

St Jude Medical Takes Over #112 Spot From EQT
Fri, Aug 28, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

DVY, CME, KMB, CLX: Large Outflows Detected at ETF
Fri, Aug 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: DVY, CME, KMB, CLX Exchange traded funds (ETFs) trade just ...

VCR, F, TWC, TGT: Large Outflows Detected at ETF
Fri, Aug 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: VCR, F, TWC, TGT Exchange traded funds (ETFs) trade just ...

RSP, CB, TE, CCE: ETF Outflow Alert
Fri, Aug 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: RSP, CB, TE, CCE Exchange traded funds (ETFs) trade just ...

VGK: ETF Outflow Alert
Fri, Aug 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VGK Exchange traded funds (ETFs) trade just like stocks, but ...

Utilities Select Sector SPDR Fund Experiences Big Inflow
Fri, Aug 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLU, NEE, D, SO Exchange traded funds (ETFs) trade just ...

GDX, GG, FNV, NEM: Large Inflows Detected at ETF
Fri, Aug 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: GDX, GG, FNV, NEM Exchange traded funds (ETFs) trade just ...

JNK: Large Outflows Detected at ETF
Fri, Aug 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: JNK Exchange traded funds (ETFs) trade just like stocks, but ...

14.7% of FRAK Holdings Seeing Recent Insider Buys
Fri, Aug 28, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Unconventional Oil & Gas ETF (FRAK) ...

LMT a Top 25 Dividend Giant With $2.51B Held By ETFs
Fri, Aug 28, 8:34 AM ET, by ETF Channel

Lockheed Martin Corp. (LMT) has been named as a Top 25 ''Dividend Giant'' by ETF ...

  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

Aerospace & Defense ETFs In Focus On China, U.S. Budget | Self Directed Investor | Copyright © 2008 - 2015, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of serious individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.