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

TechnipFMC Takes Over #129 Spot From Abbott Laboratories
Wed, Apr 26, 11:54 AM ET, by ETF Channel

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

FEZ: Large Inflows Detected at ETF
Wed, Apr 26, 11:14 AM ET, by ETF Channel

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

RSX, MBT, YNDX, VEON: ETF Outflow Alert
Wed, Apr 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: RSX, MBT, YNDX, VEON Exchange traded funds (ETFs) trade just ...

UPRO, MDT, MCD, ABBV: Large Outflows Detected at ETF
Wed, Apr 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: UPRO, MDT, MCD, ABBV Exchange traded funds (ETFs) trade just ...

SSO, MRK, UNH, AMGN: Large Outflows Detected at ETF
Wed, Apr 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: SSO, MRK, UNH, AMGN Exchange traded funds (ETFs) trade just ...

PowerShares High Yield Equity Dividend Achievers Portfolio Experiences Big Outflow
Wed, Apr 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: PEY, PPL, CNP, ED Exchange traded funds (ETFs) trade just ...

EWP: ETF Inflow Alert
Wed, Apr 26, 10:54 AM ET, by ETF Channel

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

EWZ: ETF Outflow Alert
Wed, Apr 26, 10:54 AM ET, by ETF Channel

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

15.2% of DVY Holdings Seeing Recent Insider Buys
Wed, Apr 26, 10:34 AM ET, by ETF Channel

A look at the weighted underlying holdings of the iShares Select Dividend ETF (DVY) shows ...

Healthstream Reaches Analyst Target Price
Wed, Apr 26, 10:34 AM ET, by ETF Channel

In recent trading, shares of Healthstream Inc (HSTM) have crossed above the average analyst 12-month ...

CDW Reaches Analyst Target Price
Wed, Apr 26, 10:24 AM ET, by ETF Channel

In recent trading, shares of CDW Corp (CDW) have crossed above the average analyst 12-month ...

ICHR Crosses Above Average Analyst Target
Wed, Apr 26, 10:24 AM ET, by ETF Channel

In recent trading, shares of Ichor Holdings Ltd (ICHR) have crossed above the average analyst ...

BIDU Crosses Above Average Analyst Target
Wed, Apr 26, 10:24 AM ET, by ETF Channel

In recent trading, shares of Baidu, Inc. (BIDU) have crossed above the average analyst 12-month ...

Check Point Software Technologies Reaches Analyst Target Price
Wed, Apr 26, 10:24 AM ET, by ETF Channel

In recent trading, shares of Check Point Software Technologies, Ltd. (CHKP) have crossed above the ...

SFLY Crosses Above Average Analyst Target
Wed, Apr 26, 10:24 AM ET, by ETF Channel

In recent trading, shares of Shutterfly Inc (SFLY) have crossed above the average analyst 12-month ...

Las Vegas Sands Reaches Analyst Target Price
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of Las Vegas Sands Corp (LVS) have crossed above the average ...

Rexnord Reaches Analyst Target Price
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of Rexnord Corp (RXN) have crossed above the average analyst 12-month ...

DPLO Crosses Above Average Analyst Target
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of Diplomat Pharmacy Inc (DPLO) have crossed above the average analyst ...

CXW Crosses Above Average Analyst Target
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of CoreCivic Inc (CXW) have crossed above the average analyst 12-month ...

Actuant Reaches Analyst Target Price
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of Actuant Corp (ATU) have crossed above the average analyst 12-month ...

SHW Crosses Above Average Analyst Target
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of Sherwin-Williams Co (SHW) have crossed above the average analyst 12-month ...

Versum Materials Reaches Analyst Target Price
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of Versum Materials Inc (VSM) have crossed above the average analyst ...

TRTN Crosses Above Average Analyst Target
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of Triton International Ltd (TRTN) have crossed above the average analyst ...

MCD Crosses Above Average Analyst Target
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of McDonald's Corp (MCD) have crossed above the average analyst 12-month ...

Armstrong Flooring Reaches Analyst Target Price
Wed, Apr 26, 10:14 AM ET, by ETF Channel

In recent trading, shares of Armstrong Flooring Inc (AFI) have crossed above the average analyst ...

PowerShares DB US Dollar Index Bullish Fund Breaks Below 200-Day Moving Average - Notable for UUP
Tue, Apr 25, 11:34 AM ET, by ETF Channel

In trading on Tuesday, shares of the PowerShares DB US Dollar Index Bullish Fund ETF ...

PowerShares Build America Bond Portfolio Experiences Big Outflow
Tue, Apr 25, 11:24 AM ET, by ETF Channel

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

SQQQ: ETF Outflow Alert
Tue, Apr 25, 11:24 AM ET, by ETF Channel

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

Daily Gold Miners Index Bull 3X Shares Experiences Big Inflow
Tue, Apr 25, 11:14 AM ET, by ETF Channel

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

IWB, FB, GOOG, VZ: Large Inflows Detected at ETF
Tue, Apr 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWB, FB, GOOG, VZ Exchange traded funds (ETFs) trade just ...

HYG: Large Inflows Detected at ETF
Tue, Apr 25, 11:14 AM ET, by ETF Channel

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

SPDR S&P MIDCAP 400 ETF Experiences Big Outflow
Tue, Apr 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: MDY, DRE, RMD, RE Exchange traded funds (ETFs) trade just ...

DXJ: Large Outflows Detected at ETF
Tue, Apr 25, 11:14 AM ET, by ETF Channel

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

XLP, MO, WMT, PEP: ETF Inflow Alert
Tue, Apr 25, 11:14 AM ET, by ETF Channel

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

XLK, ORCL, MA, ADBE: ETF Outflow Alert
Tue, Apr 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLK, ORCL, MA, ADBE Exchange traded funds (ETFs) trade just ...

18.1% of VYM Holdings Seeing Recent Insider Buys
Tue, Apr 25, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard High Dividend Yield ETF (VYM) ...

Beacon Roofing Supply Reaches Analyst Target Price
Tue, Apr 25, 9:44 AM ET, by ETF Channel

In recent trading, shares of Beacon Roofing Supply Inc (BECN) have crossed above the average ...

MTSI Crosses Above Average Analyst Target
Tue, Apr 25, 9:44 AM ET, by ETF Channel

In recent trading, shares of MACOM Technology Solutions Holdings Inc (MTSI) have crossed above the ...

FCH Crosses Above Average Analyst Target
Tue, Apr 25, 9:34 AM ET, by ETF Channel

In recent trading, shares of FelCor Lodging Trust Inc (FCH) have crossed above the average ...

TIF Crosses Above Average Analyst Target
Tue, Apr 25, 9:34 AM ET, by ETF Channel

In recent trading, shares of Tiffany & Co. (TIF) have crossed above the average analyst ...

OKE Crosses Above Average Analyst Target
Tue, Apr 25, 9:34 AM ET, by ETF Channel

In recent trading, shares of ONEOK Inc (OKE) have crossed above the average analyst 12-month ...

AMX Crosses Above Average Analyst Target
Tue, Apr 25, 9:34 AM ET, by ETF Channel

In recent trading, shares of America Movil SAB de CV (AMX) have crossed above the ...

HUN Crosses Above Average Analyst Target
Tue, Apr 25, 9:24 AM ET, by ETF Channel

In recent trading, shares of Huntsman Corp (HUN) have crossed above the average analyst 12-month ...

Harley-Davidson Reaches Analyst Target Price
Tue, Apr 25, 9:24 AM ET, by ETF Channel

In recent trading, shares of Harley-Davidson Inc (HOG) have crossed above the average analyst 12-month ...

Campbell Soup Reaches Analyst Target Price
Tue, Apr 25, 9:24 AM ET, by ETF Channel

In recent trading, shares of Campbell Soup Co. (CPB) have crossed above the average analyst ...

Stage Stores Reaches Analyst Target Price
Tue, Apr 25, 9:24 AM ET, by ETF Channel

In recent trading, shares of Stage Stores Inc. (SSI) have crossed above the average analyst ...

TransUnion Reaches Analyst Target Price
Tue, Apr 25, 9:24 AM ET, by ETF Channel

In recent trading, shares of TransUnion (TRU) have crossed above the average analyst 12-month target ...

CBPX Crosses Above Average Analyst Target
Tue, Apr 25, 9:24 AM ET, by ETF Channel

In recent trading, shares of Continental Building Products Inc (CBPX) have crossed above the average ...

CC Crosses Above Average Analyst Target
Tue, Apr 25, 9:24 AM ET, by ETF Channel

In recent trading, shares of Chemours Co (CC) have crossed above the average analyst 12-month ...

VECO Crosses Above Average Analyst Target
Tue, Apr 25, 9:14 AM ET, by ETF Channel

In recent trading, shares of Veeco Instruments Inc (VECO) have crossed above the average analyst ...

  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 - 2017, 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.