SPDR S&P Aerospace & Defense ETF Excludes Palantir Despite 66% Revenue Jump
The SPDR S&P Aerospace & Defense ETF offers exposure to rising defense budgets but does not include Palantir, which has seen U.S. government contract revenues jump 66% y/y in Q4. As geopolitical tensions rise, XAR’s diversified holdings could attract more institutional investors seeking defense sector stability.
1. XAR’s Portfolio and Defense Focus
The SPDR S&P Aerospace & Defense ETF holds leading aerospace and defense firms including Lockheed Martin, Raytheon, Northrop Grumman and Boeing, providing broad exposure to U.S. and international military spending. Its weightings reflect rising budget allocations across air, land and space defense segments.
2. Palantir’s Government Contracts Boost
Palantir generates roughly 42% of its revenue from U.S. government contracts and delivered 66% year-over-year growth in that segment during Q4, cementing its defense relevance. This performance has driven its inclusion in several defense-tech ETFs but did not meet XAR’s sector criteria.
3. ETF Inclusion Divergence
While defense ETFs like Global X Defense Tech, Defiance Drone & Modern Warfare and U.S. Global Technology & Aerospace & Defense include Palantir, XAR’s mandate focuses on traditional aerospace and defense prime contractors. This divergence highlights varying strategies for capturing the defense theme.
4. Investor Implications with Geopolitical Tensions
With tensions persisting and defense budgets rising, XAR may see increased institutional inflows as managers rebalance toward defense stability. Investors seeking both aerospace diversification and growth may compare XAR’s steady portfolio against more specialized defense-tech vehicles.