At a glance
XAR charges 0.35% a year, below the 0.48% average of the 8 funds most like it (the 2nd cheapest of 9). It has $6.47B in assets, the 4th largest of that group; it paid 0.19% of its price in distributions over the past 12 months, quarterly. Over the past year it returned −10.5% with distributions reinvested (S&P 500: +11.5%), the weakest of those 9 funds; over three years it returned +26.6% a year. At its worst it fell 27.6% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 14 months after the low. Its ten largest positions make up 30.4% of the fund, out of 48 in all.
The short version
SPDR S&P Aerospace & Defense ETF (XAR) is a State Street index fund. It tracks the S&P Aerospace & Defense Select Industry Index, which held 47 U.S. aerospace and defense stocks as of July 31, 2026. The index gives each company a roughly similar weight, so midsize names such as VSE and StandardAero count about as much as larger ones like GE and RTX. Its 0.35% expense ratio is below the 0.48% average of similar funds.
Price history
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XAR -10.5% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| XAR official prospectus, to Dec 31, 2025 | — | +46.21% | — | +16.71% | +17.28% | — |
| XAR price data to Oct 27, 2026 | -6.9% | -10.5% | +26.6% | +14.0% | — | +15.9% |
- Over the year to Oct 27, 2026, XAR returned -10.5%, 9th of 9 among similar funds.
- Its 5-year annualized return was +14.0%.
- Its worst full calendar year was 2022 (-5.0%); its best was 2025 (+46.1%).
- The deepest fall in its price history was 32.4% (Jun 25, 2021 to Sep 30, 2022), recovered by Dec 19, 2023.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -6.8% | — |
| 2025 | +46.1% | +46.21% |
| 2024 | +23.3% | +23.17% |
| 2023 | +23.8% | +23.66% |
| 2022 | -5.0% | -5.01% |
| 2021 | +2.3% | +2.38% |
| 2020 | — | +6.06% |
| 2019 | — | +39.25% |
| 2018 | — | -4.47% |
| 2017 | — | +32.81% |
| 2016 | — | +21.37% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Not in the price data, which starts Jun 2, 2020 |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 19.5% over that stretch · deepest drop along the way 27.6%, back to its old high 13.8 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.3000 | |
| 2025 | $0.9600 | -12.7% |
| 2024 | $1.1000 | +50.7% |
| 2023 | $0.7300 | +32.7% |
| 2022 | $0.5500 | -43.9% |
| 2021 | $0.9800 |
What's inside
As of Jun 30, 2026, the fund held 48 securities; the ten largest made up 30.39% of assets. It also reported 3.04% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.
| Holding | Weight | |
|---|---|---|
| VSE Corp | 3.40% | |
| Axon Enterprise Inc | 3.22% | |
| StandardAero Inc | 3.11% | |
| FTAI Aviation Ltd | 3.08% | |
| Carpenter Technology Corp | 3.04% | |
| General Electric Co | 3.02% | |
| Woodward Inc | 2.98% | |
| HEICO Corp | 2.86% | |
| Moog Inc | 2.86% | |
| TransDigm Group Inc | 2.83% | |
| Hexcel Corp | 2.81% | |
| Karman Holdings Inc | 2.80% | |
| Howmet Aerospace Inc | 2.77% | |
| ATI Inc | 2.77% | |
| RTX Corp | 2.75% |
By country
United States 96.87%Cayman Islands 3.08%By asset type
Stocks 99.95%What changed recently
- Over the three months to Jun 30, 2026, investors added a net $11.3M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +1.98%, +11.18%, -1.39%.
How it works
XAR tracks the S&P Aerospace & Defense Select Industry Index, run by S&P Dow Jones Indices. The index starts with the S&P Total Market Index, which covers the broad U.S. stock market. It keeps only companies in the Aerospace & Defense sub-industry of the Global Industry Classification Standard (GICS), a system that sorts companies mainly by revenue. Each company must be based in the U.S. and pass size and trading tests. In most cases that means a float-adjusted market value (the value of shares freely available to trade) of at least $500 million, or $400 million if the stock trades more heavily. A company is dropped if its value falls below $300 million or its trading falls too low. As of July 31, 2026, the index held 47 stocks.
The index is modified equal weighted. Instead of giving the largest companies the biggest slices, it spreads money fairly evenly across its members. As of June 30, 2026, the largest holding, VSE Corp, was 3.4% of the fund, and the top ten made up 30.4%. The index rebalances quarterly, on the third Friday of March, June, September and December, with a second reweighting near each quarter's end. Turnover was 33%.
The adviser, SSGA Funds Management, may hold only a sample of the index's stocks. It must keep at least 80% of assets in index securities, and it may use futures contracts and cash to manage money coming in and out.
What it really costs
- XAR charges 0.35% a year, versus an average of 0.48% for the similar funds below (2nd of 9, cheapest first).
- Using the prospectus's standard example, $10,000 invested would cost about $36 in the first year and $443 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| XAR | $36 | $113 | $197 | $443 |
In a retirement portfolio
It is a single-industry fund with a 1.41 beta and steep past drops, so it fits as a small add-on to a diversified core rather than as a foundation.
XAR could add focused exposure to U.S. aerospace and defense. Its prospectus shows average annual returns of 16.71% over five years and 17.28% over ten years through December 31, 2025. Its worst calendar year since 2016 was 2022, down 5.01%, but some drops within a year were much steeper. It lost 29.93% in the first quarter of 2020. In the 2022 bear market it fell 27.6% and took 13.8 months to recover. Its deepest drop was 32.4%, from June 2021 to September 2022, and recovery took 14.6 months. The fund launched in 2011, so it has no 2008 record. Anyone who had to sell during a slump like these would lock in losses. Income is small: the yield was 0.19% as of October 27, 2026, paid quarterly. Under the SEC's standard example, costs come to $36 in the first year on $10,000. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want a small, targeted stake in U.S. aerospace and defense for 0.35% a year, below the 0.48% average of similar funds.
- Those who would rather spread money evenly across about 48 companies, including midsize suppliers like VSE and Woodward, than lean on the biggest contractors.
- Long-term holders able to sit through drops like the 32.4% fall from June 2021 to September 2022, which took 14.6 months to recover.
Look elsewhere if
- Retirees who need income: the trailing yield was just 0.19% as of October 27, 2026, paid quarterly.
- Investors who want broad diversification, since this fund holds one industry that depends heavily on government defense spending.
- People uncomfortable with sharp swings: beta was 1.41, and the fund lost 10.5% in the year to October 27, 2026, last among nine similar funds.
Close alternatives
Matched by holdings overlap from the latest N-PORT reports.
| Fund | Overlap | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| XAR this fund | — | 0.35% | $6.47B | -10.5% | +26.6% |
| GCAD Gabelli Commercial Aerospace and Defense ETF | 53% | 0% | $43.7M | +6.2% | +29.7% |
| MISL First Trust Indxx Aerospace & Defense ETF | 50% | 0.6% | $801.9M | -5.2% | +23.9% |
| ITA iShares U.S. Aerospace & Defense ETF | 50% | 0.4% | $14.44B | -0.3% | +24.8% |
| PPA Invesco Aerospace & Defense ETF | 48% | 0.57% | $8.26B | -1.3% | +26.1% |
| ROKT SPDR S&P Kensho Final Frontiers ETF | 39% | 0.45% | $248.4M | +28.0% | +40.5% |
| NATO Themes Transatlantic Defense ETF | 37% | 0.35% | $100.7M | -7.3% | — |
| SHLD Global X Defense Tech ETF | 22% | 0.5% | $7.24B | -6.9% | +36.9% |
Questions investors ask
Does XAR pay dividends?
Yes, but very little. XAR pays dividends quarterly. Its trailing 12-month yield was 0.19% as of October 27, 2026, about $0.42 per share. That is too small to be a meaningful source of retirement income. Investors usually own XAR for exposure to aerospace and defense stocks and their potential growth, not for payouts. Anyone who needs regular cash flow would have to get it from other parts of their portfolio.
What's the difference between XAR and ITA?
Both funds hold U.S. aerospace and defense stocks, and about half of their holdings overlap. XAR charges 0.35% a year, and ITA charges 0.40%. XAR's index is modified equal weighted, so smaller suppliers carry roughly as much weight as large contractors. ITA is bigger, with about $14.4 billion in net assets as of June 30, 2026, compared with $6.5 billion for XAR. Over the year to late October 2026, ITA lost 1.2% and XAR lost 10.5%.
What are XAR's top holdings?
As of June 30, 2026, XAR's largest positions were VSE Corp (3.4%), Axon Enterprise (3.2%), StandardAero (3.1%), FTAI Aviation (3.1%), Carpenter Technology (3.0%) and General Electric (3.0%). Because the index is modified equal weighted, no single stock dominates. The top ten made up 30.4% of a portfolio of 48 companies. Other holdings include Woodward, HEICO, Moog, TransDigm, Howmet Aerospace and RTX.
Is XAR a risky ETF?
Yes. It is riskier than a broad stock fund. XAR holds a single industry that depends heavily on government defense spending. As of October 27, 2026, its beta (a measure of how much it moves with the market) was 1.41. It lost 29.93% in the first quarter of 2020. It fell 32.4% between June 2021 and September 2022 and took 14.6 months to recover. In the year to October 27, 2026, it was down 10.5%, last among nine similar funds.
What is XAR's expense ratio?
XAR's expense ratio is 0.35% a year, according to its prospectus filed October 26, 2026, and there is no fee waiver. That ranks second lowest among nine similar funds and is below their 0.48% average. ITA charges 0.40% and PPA charges 0.57%. The SEC's standard example assumes $10,000 invested with a 5% annual return. On that basis, costs would be about $36 after one year, $197 after five years and $443 after ten.