Published by Global Banking & Finance Review®
Posted on January 20, 2025
2 min readLast updated: January 27, 2026
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VanEck expects defence sector growth as Trump returns, with increased NATO spending and geopolitical tensions driving ETF demand.
By Sudip Kar-Gupta
BRUSSELS (Reuters) - Demand for a leading defence sector exchange-traded fund (ETF) has been growing ahead of the return of Donald Trump to the White House, said investment company and ETF issuer VanEck.
The European arm of the New York-headquartered company launched its VanEck Defense UCITS ETF in March 2023. It rose around 55% in 2024 and is already up around 8% at the start of 2025, with assets under management of around $1.8 billion.
"We are observing strong momentum in the defense sector. Since the launch of our fund, we've experienced consistent inflows with the ongoing global geopolitical tensions being the main interest driver," said VanEck EU CEO Martijn Rozemuller.
Earlier this month, Trump said NATO members should spend 5% of their gross domestic product on defence, a significant increase from the current 2% target.
Officials and analysts have also told Reuters they expect NATO to agree to go beyond this current defence spending target.
"As the political climate evolves, so too does investor sentiment towards defense stocks. Just a few years ago, the sector was taboo for most institutional investors. Today, with supporting government policies, the contrast could not be bigger," added Rozemuller.
The ETF's top holdings include Palantir Technologies, Thales, Booz Allen Hamilton and Leonardo.
(Reporting by Sudip Kar-Gupta; Editing by Mark Potter)
The VanEck Defense UCITS ETF rose around 55% in 2024 and is already up around 8% at the start of 2025.
The ongoing global geopolitical tensions are the main interest drivers for the growing demand in the defense sector.
Trump suggested that NATO members should spend 5% of their gross domestic product on defense, which is a significant increase from the current 2% target.
Investor sentiment towards defense stocks has evolved, with the sector previously being taboo for most institutional investors, but now gaining traction due to supporting government policies.
The ETF's top holdings include Palantir Technologies, Thales, Booz Allen Hamilton, and Leonardo.
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