Launched on October 25, 2022, the First Trust Indxx Aerospace & Defense ETF (MISL Quick QuoteMISL - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Aerospace & Defense segment of the equity market.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Aerospace & Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $201.27 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Aerospace & Defense segment of the equity market. MISL seeks to match the performance of the INDXX US AEROSPACE & DEFENSE INDEX before fees and expenses.

The Indxx US Aerospace & Defense Index consists of a universe of U.S. companies engaged in business activities associated with certain aerospace and defense sub-themes.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.6%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.55%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector -- about 97% of the portfolio.

Looking at individual holdings, General Aerospace Company (GE) accounts for about 8.56% of total assets, followed by Rtx Corporation (RTX) and The Boeing Company (BA).

The top 10 holdings account for about 60.33% of total assets under management.

Performance and Risk

The ETF has added about 34.43% so far this year and is up about 29.72% in the last one year (as of 09/24/2025). In that past 52-week period, it has traded between $27.51 and $40.85.

The ETF has a beta of 0.65 and standard deviation of 17.08% for the trailing three-year period. With about 35 holdings, it has more concentrated exposure than peers.

Alternatives

First Trust Indxx Aerospace & Defense ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, MISL is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Invesco Aerospace & Defense ETF (PPA) tracks SPADE Defense Index and the iShares U.S. Aerospace & Defense ETF (ITA) tracks Dow Jones U.S. Select Aerospace & Defense Index. Invesco Aerospace & Defense ETF has $6.49 billion in assets, iShares U.S. Aerospace & Defense ETF has $11.28 billion. PPA has an expense ratio of 0.57%, and ITA charges 0.38%.

Bottom Line

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