(MISL) Indxx Aerospace & Defense - Overview

The First Trust Indxx Aerospace & Defense ETF (MIS L) is a U.S.–based industrials ETF that must allocate at least 80 % of its net assets to the common stocks that compose its underlying rules-based index. Although the index follows a quantitative methodology, the provider retains discretionary authority to add, remove, or delay securities based on qualitative judgment, making the fund’s composition subject to occasional non-mechanical adjustments. The ETF is classified as non-diversified, meaning it may hold a relatively concentrated set of holdings compared with broadly diversified funds.

Key sector drivers that can materially affect MISL’s performance include: (1) U.S. defense spending trends-annual discretionary budget allocations have risen from $704 bn in FY 2022 to a projected $738 bn in FY 2024, supporting revenue growth for major contractors; (2) Commercial aerospace demand, measured by the Aircraft Orders and Deliveries Index, which has rebounded to a 2023-average of 1.8 million seats, indicating recovery in airline capacity and downstream supplier activity; and (3) Supply-chain resilience metrics, such as the Aerospace Supplier Confidence Index, which recently improved to 58 (above the 50-point neutral threshold), suggesting easing bottlenecks that historically compress margins.

If you want a deeper, data-driven view of MISL’s risk-adjusted returns and exposure breakdown, a quick look at ValueRay’s analytics can help you spot any hidden concentration risks before you commit capital.