VanEck’s defence ETF has hit the $1bn assets under management (AUM) landmark as military spending continues to ramp up worldwide.
The VanEck Defense UCITS ETF (DFNS) launched in 2023 and reached $100m AUM just seven months after, with assets swelling to $500m in April this year.
Pure-play defence ETFs are well placed against a backdrop of an increasingly unstable geopolitical landscape, as Western countries dramatically increase their defence spending.
Commenting, Martijn Rozemuller, CEO of VanEck Europe, said: “Many investors now perceive substantial opportunities in shares of companies operating in the security and defence sector.
“This shift of sentiment has driven a notable surge in defence stock prices, as evidenced by the performance of the VanEck Defense UCITS ETF since its launch in March 2023.”
DFNS tracks the MarketVector Global Defence Industry index which captures 28 companies involved in serving national defence companies, with the top three holdings being Palantir Technologies (10.0%), Leidos (7.7%) and Booz Allen Hamilton (7.2%).
VanEck was the first issuer to launch a pure play defence ETF and was followed by the launch of HANetf’s Future of Defence UCITS ETF (NATO) the same year and the iShares Global Aerospace & Defence UCITS ETF (DFND) in February this year.
DFND is the cheapest defence ETF with a total expense ratio (TER) of 0.35% and houses the least assets at $77m, followed by NATO at 0.49% with £465m AUM and finally DFNS with a fee of 0.55%.
The success of DFNS, alongside VanEck’s rare earth industry ETF, helped to boost the asset manager’s European ETF AUM to $10bn in May.
