NATO aligned Future of Defence ETF Surpasses $1 Billion AUM Milestone
20 FEB, 2025
By Jose Luis Palmer from RankiaPro Europe
Future of Defence UCITS ETF (ticker: NATO) has reached $1.08 billion in assets under management (AUM), highlighting strong investor demand for exposure to NATO and NATO+ ally defence and cyber defence spending.
The ETF, launched on 4 July 2023, is listed on major European exchanges and employs a unique “NATO screen”, ensuring investments are limited to companies domiciled in NATO or NATO+ ally member states. This strategy aligns with investors seeking a more responsible approach to defence investing, focusing on firms operating within allied nations.
Growing Geopolitical Tensions Drive Defence Investment
European defence stocks have surged as NATO members increase military budgets, recognizing the need to bolster defences independently of U.S. support. While only seven NATO members met the 2%-of-GDP defence spending target in 2022, the number rose to 23 out of 32 members in 2024. However, U.S. President Donald Trump has called for even higher contributions, potentially up to 5% of GDP.
Amid rising global tensions and uncertain U.S. military aid, European NATO members may be compelled to further increase defence spending. The Future of Defence UCITS ETF captures this trend by providing exposure to defence companies based in NATO-aligned countries.
On a one-year basis, the ETF has seen $210.01 million in net new assets, reflecting strong investor appetite for the defence theme.
HANetf Celebrates ETF’s Unique Approach and Growth
We are delighted to see NATO ETF exceed the $1 billion AUM milestone. The need for NATO members to spend more on defence is now a recurring news story, especially when it comes to Europe. Most recently, we’ve seen European leaders overlooked in talks between Trump and Putin over Ukraine, and blasted by Vice President Vance at the Munich Security Conference. All of this points to a changing norm, where Europe cannot simply rely on the U.S. for its defence – especially if it wants a seat at the negotiating table.
Conflicts persist in Ukraine and the Middle East, and other areas of geopolitical tension threaten to erupt into hostilities. In such an environment, European NATO members face no choice other than to increase defence spending, whether it’s to ensure the U.S. remains part of the alliance, or to defend themselves should it leave.
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
With HANetf leading European crypto ETP flows in 2024, accumulating $520 million in net new flows, the firm continues to expand its range of innovative investment products.
