New York  London  GMT  Tokyo  Singapore 
Tom Lydon

Three Good Reasons To Look At Defense-Related ETFs

By Tom Lydon on December 9, 2008 | More Posts By Tom Lydon | Author's Website

Democrats are in the house and investors and exchange traded funds (ETFs) focusing on defense and military contractors need to be examined, because there are compelling arguments on both sides as to whether their future is bearish or bullish.

According to Merrill Lynch (MER), aerospace and defense has done better under a Democratic rule, especially during a recession, because national security is a good hedge against the broad market, says Pauline Miniter for SmartMoney.

Investors are nervous about President-elect Barack Obama, as many think that while defense spending may not slow, there is going to be a shift of priorities in Washington.

Obama’s administration plans to cut defense spending, which will cut into profits. However, as Joe Biden puts it, it won’t be six months into the new administration when a rogue state will test the new president. There’s still enough uncertaintly in the world that defense companies should remain relevant.

Shareholders in companies such as Raytheon (RTN), Boeing (BA), Lockheed Martin (LMT), and Northrop Grumman (NOC) are left feeling vulnerable as losses ranged from 20% to 50% in the last year.

  • iShares Dow Jones U.S. Aerospace & Defense (ITA): down 43.6% year-to-date; Boeing is 8.4%; Raytheon is 7.8%; Lockheed Martin is 7.8%; Northrop is 5.3%

Aerospace & Defense ETF

  • PowerShares Aerospace and Defense (PPA): down 43.9% year-to-date; Boeing is 8.5%; Lockheed Martin is 7.2%; Raytheon is 5.8%; Northrop is 4.3%

Aerospace & Defense ETF

Posted in Categories: Contributor, ETFs, External Research, Stocks, UK, USA.

If you like this article please...
Subscribe by RSS Subscribe by Email Email This Post To A Friend Email This Post To A Friend

Leave A Comment :

Name (required)
E-mail (required - never shown publicly)
URI
Subscribe to comments via email
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.
Opinions From Our Contributors
Commodities Financials Exchange Traded Funds
Stocks Forex Economy