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Boeing executives testify on Capitol Hill—here are the ETFs most exposed to the stock

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It's been a bad run for Boeing.

Shares of the aerospace giant — which has been struggling for months with the fallout from two deadly crashes of its 737 Max 8 airplane models, in which 346 people were killed — have been on an arduous path lower, falling nearly 21% since the beginning of March.

On Tuesday, Boeing's top executives faced lawmakers on Capitol Hill to testify about the crisis, admitting to senators that Boeing made mistakes in developing the fatally flawed plane model.

Despite that, Boeing shares were nearly 2% higher after CEO Dennis Muilenburg's testimony, in which he declined to say whether or not he would resign over the debacle.

Exchange-traded funds with exposure to Boeing, and the aerospace and defense sector more broadly, also held up in Tuesday's trading session.

Of the 170 U.S. ETFs that own Boeing, the iShares U.S. Aerospace & Defense ETF (ITA) has one of the highest exposures, with the stock accounting for nearly 21% of its portfolio. The Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN), a leveraged product, is also a big holder, with 22% of its portfolio in Boeing. Both ETFs were higher Tuesday.

And experts aren't balking at the prospect of buying ETFs with high Boeing exposure as much as some may think.

In fact, ITA is "our top pick," Mary Ann Bartels, head of ETF strategy at Bank of America Merrill Lynch Global Research, said Monday on CNBC's "ETF Edge."

"But you really have to be careful what you own," Bartels said. "If you go into the [Invesco Aerospace & Defense ETF, or] PPA, you'll get a different basket and Boeing will only make up 6%, and if you go in the [SPDR S&P Aerospace & Defense ETF, or] XAR, Boeing doesn't even show up in that basket."

Tim Seymour, founder and chief investment officer at Seymour Asset Management, also liked the idea of investing in a Boeing-heavy ETF.

"Personally, I believe owning Boeing in this environment is part of, tactically, where I would want a heavy weighting in my ETF just because I think Boeing is still a free cash flow story," he said in the same "ETF Edge" interview. "Yes, we have a lot of regulatory issues ... but I want Boeing here."

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That bullish case ties back to the recent outperformance of aerospace and defense stocks more broadly, a trend furthered on Monday with the public debut of Sir Richard Branson's space tourism company, Virgin Galactic, both experts said.

"We're very bullish on defense," Bartels said. "Defense works well in a slowing economy. It works well during a presidential election. It's not sensitive to credit or consumption."

Seymour, who said the analyst community was a bit slow to reconfigure its theories on Boeing's future, agreed with Bartels.

"The defense sector has really outperformed," he said. "If you look at a Raytheon, it's up almost 50% off of those lows in December. I'd say the entire sector is rerating a bit, and it is a bit of an all-weather investment approach."

That kind of outperformance makes Seymour, also a regular trader on CNBC's "Fast Money," more eager to buy an ETF with a higher concentration of defense stocks, rather than an equal-weighted product with a more even spread, he said.

"When I'm looking to get subsector exposure and have some concentrated play on either a reacceleration in the economy [or] a reacceleration in a sector where you've started to see a rerating, I want to be more concentrated," he said. "My view on index ETF ownership is really about participation as opposed to really being tactical."

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