Future of Defence ETF (NATO) Surpasses $750M AUM as Defence Spending Rises
28 JAN, 2025
By Jose Luis Palmer from RankiaPro Europe
The Future of Defence UCITS ETF (ticker: NATO) has reached $762.02 million in assets under management (AUM), reflecting strong investor demand for exposure to NATO and NATO+ ally defence and cyber defence spending. Over the past year, the ETF has attracted nearly $570 million in net new assets.
Key Features of the Future of Defence ETF
- NATO Screen: Limits exposure to companies domiciled in NATO and NATO+ ally nations, aligning with investors’ geopolitical concerns.
- Growing Defence Budgets: European NATO members are ramping up spending, with 23 of the 32 members now meeting or exceeding the 2%-of-GDP target, up from just 7 in 2022.
- ESG Compatibility: 94% of investors surveyed by HANetf believe defence investing is compatible with ESG, while 98% consider the country of domicile crucial for ethical defence investing.
Defence Investing Gains Momentum
With geopolitical instability rising, NATO members are under increasing pressure to boost defence budgets:
- Donald Trump’s administration has proposed that European NATO members spend up to 5% of GDP on defence.
- NATO Secretary General Mark Rutte has stated that alliance members will need to spend more than 3% to address growing security challenges.
As governments increase their commitments, defence-related investments are gaining traction, making the NATO ETF an attractive option for investors seeking strategic exposure to the sector.
HANetf's Perspective
We are delighted to see NATO ETF exceed the $750 million AUM milestone. The need for NATO members to spend more on defence is now a recurring news story.
The ETF’s NATO screen sets it apart from its peers, ensuring that investors are gaining exposure to NATO and NATO+ ally domiciled defence companies, while avoiding companies operating in countries that could one day be adversaries to the alliance. No other defence-focused ETF includes this NATO screen and, as such, the NATO ETF is truly unique.
Hector McNeil, Co-Founder and Co-CEO of HANetf
As global tensions rise and NATO commitments grow, the Future of Defence ETF continues to see strong momentum, solidifying its place as a leading thematic investment in defence and cybersecurity.
