Skip to content
Thursday, October 29, 2026 · Today’s edition, 6:30 a.m. ETThu, Oct 29 · 6:30 a.m. editionSign inMy Desk 0EditionsSign in

VettaFi defense ETF article uses Invesco PPA and its SPADE Defense Index

The Oct. 22 piece discloses VettaFi receives an index licensing fee for PPA and describes the index's 10% single-stock cap.

At a glance

  1. A disclosure at the foot of the piece, inside the Investing in Defense Content Hub, which the disclosure describes as authored and owned by VettaFi, states that VettaFi is the index provider for PPA and receives an index licensing fee.
  2. The construction the article describes is a modified cap-weighted index with a hard ceiling: no single stock may exceed 10% of the SPADE index's portfolio weight.
  3. The article's case for the ceiling is concentration risk: some defense ETFs lean heavily on a handful of names.

VettaFi published an Oct. 22 defense ETF article whose example, Invesco Aerospace & Defense ETF (PPA), tracks the SPADE Defense Index that VettaFi provides and for which VettaFi discloses an index licensing fee.

A disclosure at the foot of the piece, inside the Investing in Defense Content Hub, which the disclosure describes as authored and owned by VettaFi, states that VettaFi is the index provider for PPA and receives an index licensing fee. It also states that PPA is not issued, sponsored, endorsed or sold by VettaFi, and that Invesco Distributors is unaffiliated with VettaFi. The article argues that once an investor decides on defense exposure, index construction is what separates one ETF from another.

The construction the article describes is a modified cap-weighted index with a hard ceiling: no single stock may exceed 10% of the SPADE index's portfolio weight. Weights have to sum to 100%, so that rule implies at least ten constituents.

The article's case for the ceiling is concentration risk: some defense ETFs lean heavily on a handful of names. That approach works while those stocks work, and if they falter the fund suffers. A capped, cap-weighted index, in the article's telling, can lean into major defense and homeland-security companies without being beholden to them.

A 10% ceiling is a limit, not a target: it tells an advisor where concentration stops, not how much of the portfolio sits in the top five or ten names. The cap also trims the largest positions relative to their market weights, limiting damage when a defense leader stumbles but also limiting participation when it runs. Comparing defense ETFs on construction requires more than the ceiling: holding count and rebalance schedule do as much work as the cap itself.

Reported by the Passive & Indexing desk from ETF Trends. Published . Corrections

Related

ETFs

VettaFi buys SPADE Defense Index, the benchmark behind Invesco's $8 billion PPA

The deal follows VettaFi's August acquisition of RAFI Indices and lifts the assets tied to its aerospace and defense franchise past $11 billion.

ETFs

U.S. ETF launches hit 1,159 as 239 funds close

Closures ran at roughly one for every five launches, with 51% of U.S. ETFs holding under $100 million.

ETFs

Reckoner CEO says CLO tranche spreads reflect complexity, not credit risk

The yield case rests on senior secured first-lien loan collateral, and CLOs have only recently opened to individual investors and RIAs, Kim said.

ETFs

Invesco RAFI Strategic US ETF tops $1 billion in assets

The fund, which launched in September 2018, weights U.S. stocks by business size rather than market value.

ETFs

FTSE Russell proposes moving 74% of Russell 1000 market cap to its growth index

The value index would narrow to roughly a quarter of the large-cap gauge and add price-to-sales to its screening inputs; responses are due Dec. 11.

ETF Dailyfrom Private Wealth Daily

Flows, launches, fee moves and the funds advisors are adding to models. Daily at 6:55 a.m. ET.

Free. Every morning. Unsubscribe from any edition in one click.

From other sections