ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Leveraged & Inverse ETF Channel
  2. Aerospace and Defense Industry Might Weather Recession
Leveraged & Inverse ETF Channel
Share

Aerospace and Defense Industry Might Weather Recession

Ben HernandezSep 12, 2022
2022-09-12

Recession expectations continue to percolate in the capital markets, making investors wonder where safe haven sectors can exist to protect their capital. From a trader’s standpoint, identifying these sectors could provide gains — one of them being the aerospace and defense sector.

The sector looks primed to withstand a recession as inflation fears have morphed into fears of lower economic growth amid rising consumer prices. As such, the Federal Reserve is adopting an aggressive stance to raise interest rates, possibly to the detriment of economic growth.

While safe haven sectors like utilities could provide a shelter for capital, another to consider is aerospace and defense. Geopolitical concerns, such as Russia’s invasion of Ukraine, continue to be a primary concern whether a recession hits or not.

“National defense is detached from the economic cycle,” a MoneyWise article noted. “The government can afford to cut the defense budget during peacetime, but not during an active war. Russia’s invasion of Ukraine and rising tensions in the Taiwan Strait have compelled the U.S. congress to expand the defense budget this year.”

Strong Demand and Rising Spending

Additionally, there are sector-specific tailwinds for aerospace and defense. Strong aircraft demand and a government willing to open its pocketbook give the sector an additional boost.

“Factors unique to aerospace and defense – including strong demand for new passenger aircraft and surging military spending – should keep those industries humming through tough economic times, argues Alex Krutz,” a FlightGlobal article said. “It might be assumed that the US and European aerospace and defense (A&D) industries will, like other sectors, suffer amid economic downturns in the USA or Europe.”

Given these catalysts, traders can look to funds like the Direxion Daily Aerospace & Defense 3X Shares ETF (DFEN A-). DFEN seeks daily investment results equal to 300% of the daily performance of the Dow Jones U.S. Select Aerospace & Defense Index, which attempts to measure the performance of the aerospace and defense industry in the U.S. equity market.

Like the rest of Direxion’s roster of leveraged ETFs, DFEN gives traders the ability to:

  • Magnify short-term perspective with daily 3X leverage;
  • Go where there’s an opportunity, with bull and bear funds for both sides of the trade; and
  • Stay agile — with liquidity to trade through a rapidly changing market.

For more news, information, and strategy, visit the Leveraged & Inverse Channel.


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X