The iShares U.S. Aerospace & Defense ETF (ITA) climbed 7.5% over the past month after former President Trump signaled support for an extra $500 billion in defense outlays through 2027. This announcement followed White House discussions outlining a potential 10% annual budget increase for major programs such as F-35 upgrades and shipbuilding. The ETF’s assets under management rose to $6.2 billion, up 8% quarter-over-quarter, as institutional investors repositioned portfolios toward aerospace and defense names.

Escalating conflicts in the Middle East and renewed great-power competition in the South China Sea have driven one of the largest weekly inflows in ITA’s history. Data from LSEG shows $320 million poured into the fund last week alone, marking a 15% jump from the previous four-week average. Fund managers cited increasing order backlogs at Boeing, Northrop Grumman, and Raytheon Technologies as key catalysts, while average daily trading volume in ITA rose to 1.1 million shares.

Holdings within ITA reported combined earnings growth of 12% year-over-year in the latest quarter, led by strong F-35 production margins and higher defense services revenue. However, the fund’s weighted average forward P/E ratio expanded to 20.8x, versus 18.5x one year ago, reflecting investors’ willingness to pay up for perceived safety. The ETF’s 12-month distribution yield stands at 1.4%, compared with 1.1% in the broader S&P 500, underpinning its appeal as a modest income play amid rate uncertainty.