ITA ETF: What the iShares Defense Fund Holds and Costs
The ITA ETF holds 50 U.S. aerospace and defense companies, and its top 10 positions made up 74.54% of its $12.17 billion in net assets as of October 1, 2026. It fits an investor who wants large U.S. defense and aerospace companies in one fund at a 0.37% expense ratio. It is not built for drone exposure: Kratos was 0.62% and AeroVironment 0.42% of the fund on September 30, 2026.
What's Inside ITA (Top Holdings)
The iShares U.S. Aerospace & Defense ETF (ITA) is an exchange-traded fund (ETF) concentrated heavily in the largest aerospace and defense manufacturers in the United States. As of October 1, 2026, the fund holds 50 equity positions, but the top 10 holdings account for 74.54% of its $12.17 billion in net assets. Two corporations alone, GE Aerospace at 20.89% and RTX at 16.07%, represent 36.96% of the portfolio. A few large companies drive most of ITA's returns.
The underlying portfolio includes civil aviation giants alongside major weapons suppliers. Boeing sits as the third largest position at 7.71%, followed by specialized component makers like Howmet Aerospace at 4.64% and TransDigm Group at 4.60%. The core military primes occupy the next tier of the fund: Lockheed Martin at 4.55%, General Dynamics at 4.45%, and Northrop Grumman at 4.41%. For investors looking at defense contractor stocks, ITA provides substantial exposure to established Pentagon procurement programs.
BlackRock Fund Advisors uses representative sampling, so ITA may not hold every index component, but it keeps at least 80% of net assets in them. The prospectus classifies the fund as non-diversified, which lets it hold large positions such as GE Aerospace. Below are the top 10 holdings and their weights as of October 1, 2026.
| Company | Ticker | Portfolio Weight (%) | Primary Focus |
|---|---|---|---|
| GE Aerospace | GE | 20.89% | Commercial and military jet engines |
| RTX | RTX | 16.07% | Missile defense, radars, and aviation systems |
| Boeing | BA | 7.71% | Commercial aircraft, defense, and space |
| Howmet Aerospace | HWM | 4.64% | Engine components and structural fasteners |
| TransDigm Group | TDG | 4.60% | Proprietary aerospace components |
| Lockheed Martin | LMT | 4.55% | Tactical aircraft, missiles, and space |
| General Dynamics | GD | 4.45% | Combat vehicles, nuclear submarines, IT |
| Northrop Grumman | NOC | 4.41% | Strategic bombers, space systems, munitions |
| Honeywell Aerospace | HON | 3.78% | Avionics, propulsion, and navigation |
| L3Harris Technologies | LHX | 3.44% | Tactical radios, sensors, and rocket motors |
How the Underlying Index Weights Stocks
ITA tracks the Dow Jones U.S. Select Aerospace & Defense Index (Bloomberg ticker DJSASDT), which selects components exclusively from the Dow Jones U.S. Broad Stock Market Index. According to the S&P Dow Jones index methodology, eligible companies must operate in the Aerospace (sub-sector 2713) or Defense (sub-sector 2717) classifications. Every holding with a recorded location in the fund holdings file is listed as United States, giving the fund an entirely domestic focus.
The index employs a float-adjusted market capitalization (FMC) weighting scheme subject to strict portfolio caps. At each quarterly rebalance, individual company weights are capped at 22.5%. In addition, all companies with weights greater than 4.5% cannot exceed a combined 45% of the total index value. When this secondary cap is breached, excess weight is redistributed across uncapped constituents. The methodology sets these caps below 25%, 5% and 50% limits to leave a buffer.
Rebalancing occurs quarterly, taking effect at the market open on the Monday following the third Friday of March, June, September, and December. Between rebalances, weights drift with share prices. Investors evaluating ITA should recognize that market-cap weighting naturally awards the largest capital allocations to mature industrial conglomerates rather than emerging defense tech manufacturers.
Drone and Autonomous Systems Exposure in ITA
ITA holds very little in unmanned aerial systems (UAS). According to the fund holdings data from September 30, 2026, drone-related holdings get small weights; the drone label is our classification, not BlackRock's. Kratos Defense and Security Solutions (KTOS) accounts for just 0.62% of the fund, while AeroVironment (AVAV) sits at 0.42%. Small-cap drone maker Red Cat Holdings (RCAT) represents a negligible 0.07%, and aerospace structure supplier Karman Holdings (KRMN) makes up 0.31%.
Combined, Kratos, AeroVironment, Red Cat and Karman made up 1.42% of the fund on September 30, 2026. At those weights, a 10% move in Kratos and AeroVironment together would shift ITA by about 0.1%, while a 10% move in GE Aerospace alone would shift it by about 2%. Investors whose thesis centers on autonomous systems should look at dedicated drone ETFs or individual stocks.
ITA does hold emerging technology and adjacent commercial aerospace businesses in modest amounts. For example, space launch and satellite firm Rocket Lab (RKLB) sits at 2.98% of the fund as of September 30, 2026, while public safety and tactical device maker Axon Enterprise (AXON) holds 2.67%. Even with these positions included, traditional airframes, jet engines, and standard ordnance dominate the fund.
What ITA Costs and How Often It Pays Dividends
ITA charges a total annual fund operating expense ratio of 0.37%, as stated in the iShares Trust prospectus dated July 31, 2026. The prospectus fee example calculates that an investor deploying $10,000 would pay approximately $38 in fund expenses over one year, $119 over three years, $208 over five years, and $468 over a decade. Portfolio turnover stood at 18% in the most recent fiscal year. ITA launched on May 1, 2006.
Trading liquidity in ITA is substantial, supported by its $12.17 billion asset base. As of October 1, 2026, the fund had 58.50 million shares outstanding and traded 912,995 shares on the day, close to its 30-day average daily volume of 835,866 shares as of September 30, 2026. The 30-day median bid-ask spread was 0.05% as of September 30, 2026. On the same date, ITA traded at a price-to-earnings (P/E) ratio of 34.84 and a price-to-book (P/B) ratio of 5.89.
Income investors researching defense dividend stocks must note that ITA pays a modest yield with high payout variance. As of August 31, 2026, the 30-day SEC yield was 0.38%, and the 12-month trailing yield was 0.47%. Distributions are scheduled quarterly, with ex-dates in mid-March, mid-June, mid-September, and mid-December. Payouts vary widely: in 2026, the fund distributed $0.151325 in March, $0.163580 in June, and $0.250520 in September. The December 16, 2025 distribution was $0.00. The iShares fund page gives no reason for it.
ITA Compared to PPA, XAR, and SHLD
When choosing the best defense ETF, the closest comparison is the Invesco Aerospace & Defense ETF (PPA), which also holds only U.S.-listed stocks. PPA tracks the SPADE Defense Index, managing $7.43 billion across 67 holdings as of October 1, 2026. PPA charges more, at 0.58%. Its portfolio is less top-heavy: its top 10 made up 60.11% of assets on October 1, 2026, led by GE at 9.03%, Boeing at 8.97% and RTX at 8.94%. PPA also includes U.S.-listed international contractors like Israel's Elbit Systems (2.72%), which are absent from ITA's domestic roster.
State Street's SPDR S&P Aerospace & Defense ETF (XAR) takes a completely different structural approach by using a modified equal-weighted methodology. XAR charges a 0.35% gross expense ratio. It held $5.54 billion across 50 roughly equal positions on October 1, 2026. As of October 1, 2026, its top 10 accounted for just 30.20% of net assets, with AeroVironment holding 2.94% and Kratos holding 2.75%. That gives AeroVironment about seven times the weight it has in ITA (2.94% against 0.42% on September 30, 2026).
A third alternative is the Global X Defense Tech ETF (SHLD), which launched on September 11, 2023, and managed $6.47 billion in net assets as of October 1, 2026. SHLD charges 0.50%. Its index requires companies to earn at least 50% of revenue from cybersecurity, defense technology or advanced military hardware. Unlike ITA's pure U.S. focus, SHLD held 25.37% of its equity in European defense firms as of August 31, 2026, and carried an 11.98% position in Palantir Technologies as of October 1, 2026.
Portfolio Fit and Investor Suitability
What we see readers get wrong most often with ITA is reading "defense" as drones: AeroVironment and Kratos together weigh about a twentieth of GE Aerospace in the iShares data. If you want large U.S. aerospace and defense companies in one fund, ITA holds them at a 0.37% expense ratio.
Conversely, this fund is not suitable for investors seeking pure-play defense technology, drone warfare innovations, or cyber defense systems. AeroVironment and Kratos are each under 1% of the fund, so a rally in drone stocks would barely move ITA. Drone-focused ETFs or single stocks fit that goal better.
Our evaluation would change if the underlying Dow Jones index altered its weighting methodology to dilute the top two holdings or introduced dedicated thematic screens for defense technology. Until then, ITA's returns rest mostly on GE Aerospace, RTX, Boeing and Lockheed Martin, which together made up 49.22% of the fund on October 1, 2026.
What to Check Before Allocating Capital
Before purchasing shares of ITA, review the latest quarterly distribution dates and payout amounts on the official iShares ITA fund page. Because quarterly payments have fluctuated between $0 and about $0.75 per share since March 2025, income-seeking investors should verify current cash flow expectations rather than assuming a steady distribution yield.
If you also own a broad U.S. index fund, check the overlap. GE Aerospace, RTX and Boeing made up 44.67% of ITA on October 1, 2026, and a broad index fund may already hold them.
Finally, note the quarterly rebalance dates in the S&P Dow Jones Indices methodology: the Monday after the third Friday of March, June, September and December. At each one, the index re-applies its 22.5% single-company cap and its 45% cap on companies above 4.5%, and weights can drift above those levels in between.
ETF FAQ
Is ITA ETF a good buy?
ITA fits investors who want concentrated exposure to large-cap U.S. aerospace manufacturers and prime defense contractors. It is less suitable for buyers targeting autonomous flight or emerging defense technology, because the drone-related holdings we track (Kratos, AeroVironment, Red Cat and Karman) made up 1.42% of the fund on September 30, 2026.
What companies are in the ITA ETF?
ITA held 50 U.S. aerospace and defense stocks as of September 30, 2026. On the iShares fund page for October 1, 2026, its largest positions were GE Aerospace at 20.89%, RTX at 16.07%, Boeing at 7.71%, Howmet Aerospace at 4.64%, TransDigm Group at 4.60% and Lockheed Martin at 4.55%.
Which is better, ITA or PPA?
Neither fund is universally better, as they serve different portfolio construction strategies. ITA offers higher liquidity and a lower expense ratio of 0.37% but put 36.96% of its portfolio in two companies as of October 1, 2026. PPA charges a higher 0.58% fee across 67 holdings, offering broader exposure that includes U.S.-listed international defense contractors.
How often does ITA pay dividends?
ITA distributes dividends quarterly, with record and ex-dates typically occurring in mid-March, mid-June, mid-September, and mid-December. The payout amount varies substantially from quarter to quarter, and the fund recorded a distribution of $0.00 in December 2025.