(XAR) SPDR S&P Aerospace & Defense - Ratings and Ratios

The SPDR® S&P Aerospace & Defense ETF (ticker XAR) seeks to replicate the S&P Aerospace & Defense Select Industry Index by employing a sampling methodology, holding at least 80 % of its assets in the index constituents, which represent the aerospace and defense slice of the broader S&P Total Market Index.

Key metrics to watch: the ETF’s expense ratio sits at 0.35 % (below the industry average of ~0.45 % for pure-play defense funds), its 12-month trailing dividend yield is roughly 1.1 %, and the fund’s assets under management (AUM) have grown to about $3.2 billion, indicating solid investor interest despite recent volatility in defense spending.

Sector drivers include U.S. defense budget trends (the FY 2025 budget proposal projects a 4 % increase in discretionary defense spending), commercial aerospace demand tied to airline capacity growth (global passenger traffic is expected to rise 3-4 % YoY through 2026), and the pace of technology adoption in hypersonics and unmanned systems, which can materially boost earnings for top holdings such as Lockheed Martin and Raytheon Technologies.

Given the concentration risk in a few mega-cap defense contractors, a prudent approach is to assess the fund’s exposure to any single issuer (currently ~30 % to the top three holdings) and stress-test against potential policy shifts or procurement delays.

For a deeper, data-driven breakdown of XAR’s risk-return profile and scenario analysis, you might explore the ValueRay platform, which aggregates real-time fundamentals and forward-looking macro inputs.