In the current bear market, there aren't many safe places to invest in. But aerospace and defense are two areas that could provide safety in both the short and long term. These are critical areas of the economy that are going to keep growing over time and they attract lots of money from the government as well.
The Invesco Aerospace & Defense ETF (NYSE Arca: PPA) is a great option for this purpose as it invests in business that are, "involved in the development, manufacturing, operations and support of US defense, homeland security and aerospace operations." There are 56 holdings within the exchange-traded fund (ETF) and it is rebalanced on a quarterly basis. Some of the top names within the fund include Boeing (NYSE:BA), Raytheon Technologies (NYSE:RTX), and General Electric (NYSE:GE). The fund's management expense ratio of 0.58% is fair and is in line with other similar ETFs. The fund also pays a modest dividend yield of about 1% per year.
And while the S&P 500 has been performing poorly this year, down 19%, the Aerospace & Defense ETF is up a respectable 5% over the same time frame. And when looking over a longer period of five years, the fund has also done reasonably well, rising 45% in value, only slightly trailing the S&P over that stretch (its gains are around 51%).
Overall, the Aerospace & Defense ETF can give investors a safe place to park their money today while also being a good option for the long haul.
