ITA vs. ARKX: Proven Defense Contractors Against an Active Bet on the Space Economy
Written by Sara Appino for The Motley Fool -> iShares U.S. Aerospace & Defense ETF offers a lower expense ratio and established history compared to the newer ARK Space & Defense Innovation ETF. ARK Space & Defense Innovation ETF has outperformed on 1-year total returns but exhi
iShares U.S. Aerospace & Defense ETF offers a lower expense ratio and established history compared to the newer ARK Space & Defense Innovation ETF.
ARK Space & Defense Innovation ETF has outperformed on 1-year total returns but exhibits significantly higher volatility and a deeper maximum drawdown.
iShares U.S. Aerospace & Defense ETF focuses exclusively on the industrials sector, while ARK Space & Defense Innovation ETF includes heavy exposure to technology and consumer cyclical stocks.
The iShares U.S. Aerospace & Defense ETF (NYSEMKT:ITA) provides established, low-cost exposure to traditional U.S. defense contractors, while the ARK Space & Defense Innovation ETF (NYSEMKT:ARKX) offers an actively managed, tech-heavy approach to global orbital exploration.
Investors looking at these funds are often targeting the intersection of national security and aerospace technology. The iShares fund tracks a market-cap-weighted index of domestic aerospace firms and manages a massive $13.6 billion in assets under management (AUM). In contrast, the ARK fund takes a smaller, more thematic approach with ~$717.3 million in AUM, focusing on companies that enable space innovation regardless of their primary industry classification.
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
The iShares fund is the significantly more affordable option for long-term holders, with an expense ratio of 0.38% that is nearly half the 0.75% charged by the ARK fund. This lower fee structure provides a persistent headwind for the ARK fund in a head-to-head cost comparison, as higher expenses can significantly erode total returns over an extended investment horizon.
The iShares U.S. Aerospace & Defense ETF focuses exclusively on the industrials sector and was launched in 2006. Its portfolio of 44 holdings is concentrated in established U.S. giants; its largest positions include GE Aerospace (NYSE:GE) at 20.49%, RTX (NYSE:RTX) at 14.38%, and Boeing (NYSE:BA) at 9.16%. This passive approach offers exposure to the domestic supply chain and major government contractors.
