As the world watches Syria, concerns are building over military
action by Western powers. The Obama administration continues to
push for a military strike in order to punish the Syrian regime's
use of chemical weapons, although Russia and others remain
staunchly opposed to such action.
This tension is largely having a negative impact on U.S.
securities, reintroducing some volatility back into the market.
However, the worries have actually been pretty good news for one
sector of the economy, the defense industry (See
Aerospace and Defense ETF Investing 101
Defense Industry in Focus
The aerospace and defense sector was thought to be a victim of the
sequester and the cuts in military spending earlier in the year,
but the space persevered despite these worries. Now, with the
possibility of military action, the sector is once again in the
spotlight and could see a higher level of demand should a strike
Given this, a look to the sector may be an interesting short term
idea for traders who believe that the Syrian crisis is just
beginning. While a single stock approach could be a way to go, an
ETF technique may also be an interesting idea, especially when
looking at either of the following
SPDR S&P Aerospace & Defense ETF (
This fund has close to three dozen securities in its basket, and is
quite spread out among component stocks, putting just 35% in large
caps. The ETF charges 35 basis points a year in fees, while it has
added close to 31% in the year-to-date time frame (see
Play a Surging Defense Industry with These 3
iShares U.S. Aerospace & Defense ETF (
This ETF holds about 35 stocks in its basket, putting the bulk of
its assets in large cap stocks like UTX, BA, and LMT. The fund
charges investors about 46 basis points a year in fees, and it has
surged by 29% so far in 2013.
For more information on defense ETFs and how they might fare in the
current environment, watch our short video on the subject below:
Want the latest recommendations from Zacks Investment Research?
Today, you can download
7 Best Stocks for the Next 30 Days
Click to get this free report >>
BOEING CO (BA): Free Stock Analysis Report
ISHARS-US AEROS (ITA): ETF Research Reports
PWRSH-AERO&DEF (PPA): ETF Research Reports
UTD TECHS CORP (UTX): Free Stock Analysis
SPDR-SP AER&DEF (XAR): ETF Research Reports
To read this article on Zacks.com click here.
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for the
Next 30 Days. Click to get this free report