Top Ways to Trade the $895.2 Billion Defense Bill

With global tensions only getting worse, defense spending will rise.

We have worsening tensions between Russia and Ukraine. There’s consistent Middle East conflict. And there’s growing fear we could see nuclear war at some point.

Plus, the U.S. House just passed is yearly defense bill known as the National Defense Authorization Act (NDAA), which details how $895.2 billion allocated toward defense and national security will be spent. “The bill passed the House by a vote of 281-140 and will next move to the Senate, where lawmakers had sought a bigger boost in defense spending than the current measure allows,” added the Associated Press.

With the likely spending increase and boiling tensions, investors should keep an eye on defense stocks and exchange traded funds, such as:

SPDR S&P Aerospace & Defense ETF (XAR)

The SPDR S&P Aerospace & Defense ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Aerospace & Defense Select Industry Index. 

It has holdings in Axon Enterprise Inc., Textron Inc., and Orbital ATK Inc. for example.

iShares U.S. Aerospace & Defense ETF (ITA)

The iShares US Aerospace & Defense ETF invests in stocks in the domestic aerospace and defense sector.

These stocks can include companies that manufacture both commercial and military aircraft as well as other types of defense-related equipment. It has holdings in Boeing, United Technologies Corporation, Lockheed Martin, Raytheon, General Dynamics, and Northrop Grumman for example.

Power Shares Aerospace & Defense ETF (PPA)

The Invesco Aerospace & Defense ETF tracks a market-cap-weighted index of US-listed stocks involved in the defense, military, homeland security and space industries. 

It has holdings in Boeing, United Technologies, Honeywell International, Raytheon, and General Dynamics.

Bonus Reading: [BREAKING] Pentagon to Spend Billions on Living Missile