What are expense ratios and why do they matter for ETFs like PPA and SHLD?

An expense ratio is the annual fee a fund charges to manage its assets, expressed as a percentage of your investment. For example, PPA charges 0.58%, while SHLD charges 0.50%. This 0.08 percentage point difference may seem small, but it reduces your net returns every year. Over long periods, even minor fee differences can compound, leading to noticeable variations in final investment value. Always consider fees alongside performance when comparing funds, as lower costs can preserve more of your capital over time, assuming other factors are equal.

How do inception dates affect the reliability of ETF comparisons?

The inception date marks when a fund officially began trading and tracking its target. PPA started in October 2005, offering a long operational history with established tracking data and investor confidence. SHLD was launched in September 2023, providing a very short track record. A longer history allows for better assessment of performance across various market cycles, while newer funds like SHLD carry more uncertainty regarding how they will handle future market conditions. Limited data makes it harder to predict long-term behaviour or stability, requiring extra caution when interpreting performance metrics.

Which is cheaper, PPA or SHLD?

SHLD is cheaper with an expense ratio of 0.50%, compared to PPA's 0.58%. This means for every £10,000 invested, SHLD costs £50 per year while PPA costs £58. The difference of 0.08 percentage points may appear minor, but over several years, lower fees can help preserve more capital, assuming all other factors remain equal. Investors often consider fee differentials as part of their total cost analysis, though it is essential to weigh this against other aspects such as tracking method, holdings composition, and potential returns. Fees are a tangible, recurring cost that directly impacts net investment outcomes.

Which type of investing goal is each fund typically associated with?

PPA, with its long history since 2005 and broad aerospace and defence exposure, is often associated with investors seeking established tracking and reduced reliance on single subsectors. Its diversified top holdings, including RTX, BA, and GE, suggest a focus on broader sector stability. SHLD, launched in 2023, offers direct thematic exposure to defence technology and artificial intelligence, appealing to those targeting specific high-growth tech themes. However, its high concentration in Palantir (10.77%) introduces single-name volatility risk. PPA suits stability-oriented goals, while SHLD aligns with thematic, growth-focused strategies, though neither is financial advice.

What do the two funds track and how do their exposures differ?

The index tracked by each fund is listed as not available in the provided data. However, PPA offers broad aerospace and defence exposure, as reflected in its long operational history and diverse top holdings like RTX, BA, and GE. SHLD provides direct thematic exposure to defence technology and artificial intelligence, with a significant concentration in Palantir at 10.77%. While both funds share some major defence contractors, SHLD's focus on technology-driven defence solutions distinguishes it from PPA's broader industry coverage. This difference implies varying levels of volatility and sector sensitivity, making their market exposures quite distinct despite overlapping holdings.

Are the top holdings of PPA and SHLD similar?

The top holdings of PPA and SHLD show some overlap but also distinct differences. Shared among their top ten positions are RTX, LMT, GD, NOC, and LHX, indicating common exposure to major defence contractors. However, PPA includes BA (6.83%) and GE (6.76%), reflecting broader aerospace industrials, while SHLD features PLTR (10.77%), highlighting its thematic tech focus. This variation means that while both funds invest in large defence companies, SHLD's concentration in technology firms creates a different risk and return profile. Investors should review these differences to understand how each fund's specific holdings influence overall performance and sector exposure.

How do the dividend yields of PPA and SHLD compare?

SHLD has a higher dividend yield of 0.67% compared to PPA's 0.41%. This difference means that, based on their respective share prices, SHLD pays out more in dividends relative to its market value than PPA does. However, dividend yields can fluctuate depending on the fund's performance and distribution policies. Investors should also consider the stability of the payout, the tax implications of dividends, and how these funds manage their income distribution within the ETF structure. The higher yield of SHLD may appeal to income-focused investors, while PPA's lower yield reflects its different underlying holdings and strategy.

What is the significance of the net assets difference between PPA and SHLD?

PPA holds $7.6 billion in net assets, while SHLD has $7.1 billion. Although this difference is relatively small, larger net assets, like PPA's, generally support superior liquidity and tighter bid-ask spreads. This can make trading PPA potentially cheaper in terms of transaction costs and slippage. However, both funds have substantial asset bases, which typically indicate established investor confidence and stable management. The slight advantage in liquidity for PPA may be more relevant for high-volume traders or institutional investors, while for long-term holders, the difference might be negligible.

PPA vs SHLD

Two funds, one decision: we compare cost, performance and what each ETF actually holds in October 2026.

Compare PPA (PowerShares Aerospace & Defense ETF) and SHLD (Global X Defense Tech ETF) on fees, holdings, dividends, and market tracking. PPA carries a 0.58% expense ratio with $7.6 billion in net assets, while SHLD has a 0.50% ratio and $7.1 billion. Both hold RTX, LMT, GD, NOC, and LHX among top positions. Educational content, not financial advice.

Compare PPA (PowerShares Aerospace & Defense ETF) and SHLD (Global X Defense Tech ETF) on fees, holdings, dividends, and market tracking. PPA carries a 0.58% expense ratio with $7.6 billion in net ass...

Fund Snapshot

Key Fund Metrics

PPA

Metric

SHLD

0.58%

Expense Ratio

0.50%

0.41%

Dividend Yield

0.67%

$7.62B

Net Assets

$7.14B

63

Holdings

61

Oct 26, 2005

Inception Date

Sep 11, 2023

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Index Tracked

–

Industrials

Fund Category

Industrials

SHLD costs about $8.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	PPA	SHLD
RTXRTX Corporation	8.15%	9.10%
LMTLockheed Martin Corporation	6.69%	8.29%
GDGeneral Dynamics Corporation	5.03%	8.54%
NOCNorthrop Grumman Corporation	5.01%	7.88%
LHXL3Harris Technologies, Inc.	3.78%	3.69%

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Investment Analysis

PPA

Pros

Long operational history since 2005 provides established tracking and investor confidence
Large $7.6 billion net assets support superior liquidity and tighter bid-ask spreads
Broad aerospace and defence exposure reduces reliance on single subsector performance

Considerations

Relatively high 0.58% expense ratio impacts long-term net returns
Lower 0.41% dividend yield limits income generation for investors
Top ten holdings lack a unified index methodology as details are unavailable

SHLD

Pros

Newer fund offers direct thematic exposure to defence technology and artificial intelligence
Slightly lower 0.50% expense ratio enhances cost efficiency versus legacy peers
Higher 0.67% dividend yield improves income potential for shareholders

Considerations

Inception date in September 2023 provides a limited track record for analysis
High concentration in Palantir at 10.77% increases single-name volatility risk
Index methodology details are not available, hindering transparency assessment

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