Top Ways to Profit from Russia’s Nuclear Threats

Feb 21, 2023

Tensions with Russia are only getting worse.

Just today, Russian president Vladimir Putin suspended the country’s participation in the New START treaty, a nuclear arms control pact with the U.S. 

In addition, according to the Associated Press, “Putin also said that Russia should stand ready to resume nuclear weapons tests if the U.S. does so, a move that would end a global ban on nuclear weapons tests in place since Cold War times.”

Making matters worse, Putin warned of a “global war” as he doubled down on Ukraine, with threats of nuclear force. According to The Sun, “Moscow’s nuclear doctrine clearly states their forces can use nuclear weapons when the country’s “very existence” is at risk. Elsewhere in the speech, Putin also vowed Russia would ditch participation in a key arms control treaty – further ramping up the nuclear danger with the West.”

Should the situation escalate, defense stocks could be some of the biggest winners.

And while you can always invest in stocks such as Lockheed Martin, General Dynamics, Raytheon Technologies, and Northrop Grumman, ETFs offer better diversification at less cost. 

Invesco Aerospace & Defense ETF (PPA)

One of the best ways to diversify with defense stocks is with an ETF like the Invesco Aerospace & Defense ETF (PPA).  Not only do you gain exposure to most of the industry heavyweights, you can do so at less cost.   

With an expense ratio of 0.58%, the PPA ETF offers exposure to companies involved in the development, manufacturing, operations and support of US defense, homeland security and aerospace operations. Some of its top holdings include Lockheed Martin, Boeing, Raytheon Technologies, Honeywell, General Dynamics, and L3 Harris Technologies.

SPDR S&P Aerospace & Defense ETF (XAR)

With an expense ratio 0.35%, the SPDR S&P Aerospace & Defense ETF seeks to provide returns that correspond to the S&P Aerospace & Defense Select Industry Index. Some of its top holdings include Mercury Systems, Axon Enterprise, Northrop Grumman, Lockheed Martin, General Dynamics Corp., and L3 Harris Technologies Inc. 

iShares U.S. Aerospace & Defense ETF (ITA)

The ITA ETF is another hot defense ETF to consider.  With an expense ratio of 0.39%, the iShares US Aerospace & Defense ETF invests in stocks in the domestic aerospace and defense sector. These stocks can include companies that manufacture both commercial and military aircraft as well as other types of defense-related equipment. It has holdings in Boeing, United Technologies Corporation, Lockheed Martin, Raytheon, General Dynamics, and Northrop Grumman for example.

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