Sudip Kar-Gupta
BRUSSELS (Reuters) – Demand for a leading exchange-traded fund (ETF) in the defense sector is rising ahead of Donald Trump’s return to the White House, investment firm and ETF issuer VanEck said.
The New York-based firm’s European arm launched its VanEck Defense UCITS ETF in March 2023. It’s up around 55% in 2024 and is already up around 8% at the start of 2025, with around $1.8 billion in assets under management .
“We are seeing strong momentum in the defense sector. Since the launch of our fund, we have experienced steady inflows with ongoing global geopolitical tensions as the main driver of interest,” said VanEck EU CEO Martijn Rozemuller.
Earlier this month, Trump said NATO members should spend 5% of their gross domestic product on defense, a significant increase from the current target of 2%.
Officials and analysts also told Reuters they expected NATO to agree to exceed this current defense spending target.
“As the political climate evolves, so does investor sentiment towards military stocks. Just a few years ago, the sector was taboo for most institutional investors. Today, with the support of government policies, the contrast could not be greater,” added Rozemuller.
The ETF’s largest holdings include Palantir Technologies (NASDAQ: ), Thales (EPA: ), Booz Allen (NYSE: ) Hamilton and Leonardo.
