Should You Invest in the First Trust Indxx Aerospace & Defense ETF (MISL)?

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $748.77 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. MISL seeks to match the performance of the INDXX US AEROSPACE & DEFENSE INDEX before fees and expenses.

The Indxx US Aerospace & Defense Index consists of a universe of U.S. companies engaged in business activities associated with certain aerospace and defense sub-themes.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.6%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.31%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector -- about 84.8% of the portfolio. Telecom and Information Technology round out the top three.

Looking at individual holdings, Ge Aerospace (GE) accounts for about 8.67% of total assets, followed by The Boeing Company (BA) and Palantir Technologies Inc. (class A) (PLTR).

The top 10 holdings account for about 62.05% of total assets under management.

Performance and Risk

The ETF has added roughly 3.62% and it's up approximately 14.7% so far this year and in the past one year (as of 08/04/2026), respectively. MISL has traded between $38.07 and $51.01 during this last 52-week period.

The ETF has a beta of 0.69 and standard deviation of 20.1% for the trailing three-year period. With about 40 holdings, it has more concentrated exposure than peers.

Alternatives

First Trust Indxx Aerospace & Defense ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MISL is a good option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Invesco Aerospace & Defense ETF (PPA) tracks SPADE Defense Index and the iShares U.S. Aerospace & Defense ETF (ITA) tracks Dow Jones U.S. Select Aerospace & Defense Index. Invesco Aerospace & Defense ETF has $8.46 billion in assets, iShares U.S. Aerospace & Defense ETF has $14.41 billion. PPA has an expense ratio of 0.58%, and ITA charges 0.38%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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