9 months ago
40
The big business of defense is an agenda of the Trump administration. In a way, Trump may speak to peace, but at the same time, a little bit of conflict is good for business - the defense business. Defense, selling airplane, oil (because it is recurring) also represents high-ticket items that countries can buy/invest in, to get lower tariffs on other goods exported to the US.
It also lowers the trade deficit for some countries.
The Pentagon says that the US State Department approved a potential sale of national advanced service to missile system and related elements to Egypt for an estimated $4.67 billion.That is good news.
Ironically, the US has a net surplus with Egypt. As of 2024, the United States exporting about $6.1 billion to Egypt and importing around $2.5 billion.
In contrast, the EU, which Trump believes has been freeloading from the US with regard to defense, has started to ante up and will likely need to do more and more, if they think tariffs on export to the US will be lowered.
Below is the price run up for the iShares ETF for aerospace and defense ITA). Since the bottom in April, the price has risen 53.67%. For the year the price is up 36%.
Looking at the longer term, the 5 year chart above is showing the acceleration.
The top 10 holdings account for approximately 75% of total assets, making the fund relatively concentrated in major defense and aerospace names:
| GE Aerospace | GE | ~20.2% |
| RTX Corp. | RTX | ~15.1% |
| Boeing | BA | ~9.4% |
| Northrop Grumman | NOC | ~4.8% |
| General Dynamics | GD | ~4.7% |
| TransDigm Group | TDG | ~4.6% |
| L3Harris Technologies | LHX | ~4.5% |
| Howmet Aerospace | HWM | ~4.5% |
| Lockheed Martin | LMT | ~3.8% |
| Axon Enterprise | AXON | ~3.7% |
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