For investors seeking momentum, iShares U.S. Aerospace & Defense ETF ITA is probably on the radar. The fund just hit a 52-week high and is up 29.9% from its 52-week low price of $129.1/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
ITA in Focus
The Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market. The product charges 40 bps in annual fees (See: all Industrials ETFs here).
Why the Move?
The defense sector has been an area to watch lately, given the rise in geopolitical tensions. The heightened tensions between India and Pakistan have probably led to the recent spike in defense ETFs. Amid growing security concerns, global defense spending has been rising since Russia's invasion of Ukraine.
Note that according to the Stockholm International Peace Research Institute (SIPRI), global military spending surged to a record $2,718 billion in 2024, marking a 9.4% increase over the previous year. This represents the sharpest year-on-year rise since the Cold War era.Military spending in Europe (including Russia) rose by 17% to $693 billion and drove the global increase in 2024.
More Gains Ahead?
The ETF ITA might continue its strong performance in the near term, with a positive weighted alpha of 21.87 (as per Barchart.com), which gives cues of a further rally.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
