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Aerospace & Defense ETF (XAR) Hits New 52-Week High

Sanghamitra Saha
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For investors seeking momentum, SPDR S&P Aerospace & Defense ETF XAR is probably on radar now. The fund just hit a 52-week high and is up more than 32% from its 52-week low price of $63.16/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

XAR in Focus

This product offers returns of the U.S. Aerospace & Defense sector. Boeing Company, Orbital ATK and KLX Inc. are the top three holdings. It charges 35 bps in fees (see all Industrials ETFs here).

Why the Move?        

The defense ETF investing is shaping up in recent times. Nuclear threats from North Korea and the resultant fear for war, higher demand from commercial aviation, crisis in the Middle East and Trump’s signing of a $700 billion military budget all push the space higher. Though the $700 billion budget cannot be enacted if lawmakers do not agree to pare down a 2011-law that fixed the 2018 defense spending at $549 billion, the air around defense strongly points at optimism.

More Gains Ahead?

The fund has a Zacks Rank #2 (Buy). Also, the fund has a positive weighted alpha of 31.90. A positive weighted alpha hints at more gains. As a result, there is definitely some promise for investors who want to ride on this surging ETF.

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SPDR-SP AER&DEF (XAR): ETF Research Reports
 
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