Chart of the Day 6/18/25: Defense Stock Strength is Nothing NEW

Sure, aerospace and defense stocks are strong NOW. The catalyst – more fighting in the Middle East – is on the news 24/7.

But it’s NOT a one-week, one-month, or even one-year story. These stocks have been strong for a LONG time – and the trend is worth paying attention to as a trader.

Check out this MoneyShow Chart of the Day. It shows the performance of the $7.6 billion iShares US Aerospace & Defense ETF (ITA), along with other similar, smaller funds from ETF sponsors like Invesco, SPDR, and Global X. I also threw the SPDR S&P 500 ETF (SPY) in for comparison’s sake.

ITA, PPA, XAR, SHLD, SPY (3-Year % Change)

Data by YCharts

The outperformance is stark. ITA and PPA have returned roughly twice the SPY over the last three years. XAR has done slightly better than that. As for SHLD? It has more than 4X-ed the SPY!

These ETFs have several overlapping holdings – including defense contractors and commercial aerospace names like RTX Corp. (RTX), Boeing Co. (BA), and General Dynamics Corp. (GD). As sector funds, they natrually aren’t broadly diversified. And they will almost certainly pull back if the latest tensions simmer down.

But in this more uncertain world – with more geopolitical threats than ever – are they really worth walking away from? Or are they just the thing to defend your portfolio against volatility? In a world where the US won’t be the only nation spending more on deterrence?

The answer seems pretty clear to me.

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