PHO vs. PPA

Last updated Jun 24, 2026

PHO (Invesco Water Resources ETF) and PPA (Invesco Aerospace & Defense ETF) are both exchange-traded funds - PHO is a Water Equities fund tracking the NASDAQ OMX US Water Index, while PPA is a Aerospace & Defense fund tracking the SPADE Defense Index. Both are passively managed. Over the past 10 years, PHO returned 11.78%/yr vs 17.79%/yr for PPA. A 0.76 correlation means they provide meaningful diversification when combined. PHO charges 0.59%/yr vs 0.58%/yr for PPA.

Performance

PHO vs. PPA - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Invesco Water Resources ETF (PHO) and Invesco Aerospace & Defense ETF (PPA). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, PHO achieves a -5.09% return, which is significantly lower than PPA's 9.76% return. Over the past 10 years, PHO has underperformed PPA with an annualized return of 11.78%, while PPA has yielded a comparatively higher 17.79% annualized return.

PHO

• 1D: -0.30%
• 1M: 2.01%
• YTD: -5.09%
• 6M: -6.73%
• 1Y: -3.23%
• 3Y*: 7.30%
• 5Y*: 5.25%
• 10Y*: 11.78%

PPA

• 1D: -0.53%
• 1M: 0.95%
• YTD: 9.76%
• 6M: 7.56%
• 1Y: 26.02%
• 3Y*: 28.78%
• 5Y*: 18.41%
• 10Y*: 17.79%

*Multi-year figures are annualized to reflect compound growth (CAGR)

PHO vs. PPA - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
PHO Invesco Water Resources ETF	-5.09%	7.62%	8.59%	18.85%	-14.86%	31.28%	20.83%	37.57%	-6.40%	23.55%
PPA Invesco Aerospace & Defense ETF	9.76%	37.15%	25.28%	18.41%	9.52%	7.09%	0.45%	39.63%	-7.51%	30.10%

Correlation

The correlation between PHO and PPA is 0.50, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.50
Correlation (3Y) Calculated over the trailing 3-year period	0.63
Correlation (5Y) Calculated over the trailing 5-year period	0.67
Correlation (10Y) Calculated over the trailing 10-year period	0.71
Correlation (All Time) Calculated using the full available price history since Dec 6, 2005	0.76

Over the past year, the correlation between PHO and PPA has dropped to 0.50 - well below their long-term average of 0.76, suggesting their price drivers have been diverging.

PHO vs. PPA - Sectors Allocation Comparison

Sectors	PHO	PPA
Industrials	55.1%	90.6%
Utilities	13.8%	-
Technology	12.8%	9.2%
Healthcare	9.6%	-
Basic Materials	8.5%	-
Financial Services	0.0%	0.1%
Communication Services	-	0.1%
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Real Estate	-	-

Return for Risk

PHO vs. PPA — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

PHO

PHO Risk / Return Rank: 6
PHO Sharpe Ratio Rank: 7
PHO Sortino Ratio Rank: 6
PHO Omega Ratio Rank: 6
PHO Calmar Ratio Rank: 7
PHO Martin Ratio Rank: 6

PPA

PPA Risk / Return Rank: 38
PPA Sharpe Ratio Rank: 38
PPA Sortino Ratio Rank: 40
PPA Omega Ratio Rank: 35
PPA Calmar Ratio Rank: 40
PPA Martin Ratio Rank: 36

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

PHO vs. PPA - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Invesco Water Resources ETF (PHO) and Invesco Aerospace & Defense ETF (PPA). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	PHO	PPA	Difference
Sharpe ratio: Return per unit of total volatility	-0.21	1.30	-1.51
Sortino ratio: Return per unit of downside risk	-0.20	1.96	-2.16
Omega ratio: Gain probability vs. loss probability	0.98	1.23	-0.25
Calmar ratio: Return relative to maximum drawdown	-0.24	1.91	-2.14
Martin ratio: Return relative to average drawdown	-0.56	5.29	-5.85

PHO vs. PPA - Sharpe Ratio Comparison

The current PHO Sharpe Ratio is -0.21, which is lower than the PPA Sharpe Ratio of 1.30. The chart below compares the historical Sharpe Ratios of PHO and PPA, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

PHO vs. PPA - Drawdown Comparison

The maximum PHO drawdown since its inception was -55.62%, roughly equal to the maximum PPA drawdown of -57.37%. Use the drawdown chart below to compare losses from any high point for PHO and PPA.

Drawdown Indicators

	PHO	PPA	Difference
Max Drawdown Largest peak-to-trough decline	-55.62%	-57.37%	+1.75%
Max Drawdown (1Y) Largest decline over 1 year	-13.78%	-13.71%	-0.07%
Max Drawdown (3Y) Largest decline over 3 years	-19.19%	-15.24%	-3.95%
Max Drawdown (5Y) Largest decline over 5 years	-28.60%	-18.37%	-10.23%
Max Drawdown (10Y) Largest decline over 10 years	-34.92%	-43.92%	+9.00%
Current Drawdown Current decline from peak	-10.33%	-7.37%	-2.96%
Average Drawdown Average peak-to-trough decline	-10.18%	-9.18%	-1.00%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.79%	4.93%	+0.86%

Volatility

PHO vs. PPA - Volatility Comparison

The current volatility for Invesco Water Resources ETF (PHO) is 4.40%, while Invesco Aerospace & Defense ETF (PPA) has a volatility of 8.40%. This indicates that PHO experiences smaller price fluctuations and is considered to be less risky than PPA based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	PHO	PPA	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.40%	8.40%	-4.00%
Volatility (6M) Calculated over the trailing 6-month period	11.31%	17.09%	-5.78%
Volatility (1Y) Calculated over the trailing 1-year period	15.17%	20.15%	-4.98%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.39%	18.70%	-0.31%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.45%	20.73%	-1.28%

PHO vs. PPA - Expense Ratio Comparison

PHO has a 0.59% expense ratio, which is higher than PPA's 0.58% expense ratio.

Dividends

PHO vs. PPA - Dividend Comparison

PHO's dividend yield for the trailing twelve months is around 0.61%, more than PPA's 0.37% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
PHO Invesco Water Resources ETF	0.61%	0.54%	0.45%	0.59%	0.49%	0.20%	0.39%	0.43%	0.46%	0.34%	0.47%	0.75%
PPA Invesco Aerospace & Defense ETF	0.37%	0.42%	0.61%	0.67%	0.83%	0.59%	0.88%	0.95%	0.90%	0.67%	1.70%	1.41%

Frequently Asked Questions

Can I hold both PHO and PPA in my portfolio?

PHO and PPA have a correlation of 0.50, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, PHO or PPA?

PPA has higher volatility (8.40%) compared to PHO (4.40%). In terms of maximum drawdown, PHO dropped -55.62% vs PPA's -57.37%.

Which ETF is better, PHO or PPA?

On 10-year performance, PPA leads with 17.79% vs 11.78% for PHO. On fees, PPA is cheaper at 0.58% per year. On volatility, PHO has been the lower-risk option at 4.40%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, PHO or PPA?

Over the 10-year period, PPA has performed better with a 17.79% return vs 11.78%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, PHO or PPA?

PPA is cheaper with a 0.58% expense ratio, compared with 0.59% for PHO.

Which ETF pays a higher dividend yield, PHO or PPA?

PHO has the higher dividend yield at 0.61%, compared with 0.37% for PPA.

What is the main difference between PHO and PPA?

PHO is categorized as Water Equities, while PPA is Aerospace & Defense. PHO tracks NASDAQ OMX US Water Index, while PPA tracks SPADE Defense Index. Their fees differ too: 0.59% for PHO and 0.58% for PPA.

Which has better risk-adjusted returns?

PPA currently has the higher Sharpe Ratio (1.30 vs -0.21), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.