VanEck launches defense industry ETF

Apr 4th, 2023 | By | Category: Equities

VanEck has launched the first ETF in Europe to target companies operating in the defense industry.

Martijn Rozemuller, Head of Europe at VanEck.

Martijn Rozemuller, CEO at VanEck Europe

The VanEck Defense UCITS ETF has been listed on London Stock Exchange in US dollars (DFNS LN) and pound sterling (DFNG LN) as well as on Deutsche Börse Xetra in euros (DFEN GY).

VanEck notes that many governments in Western Europe have consistently missed NATO’s 2% target for defense spending in the past; however, with geopolitical tensions rising in recent years, most have announced significant investments in defense infrastructure and stockpiles.

Martijn Rozemuller, CEO at VanEck Europe, said: “The defense sector has traditionally been a sensitive topic in Europe. However, since the start of the war in Ukraine, the views on security and defense policy have started shifting as the need for security policy has become more obvious. Due to the Russian invasion of Ukraine, tensions in Asia, and global uncertainty, security and defense are back on investors’ minds after being shunned for several years.”

The ETF is linked to the MarketVector Global Defense Industry Index which includes companies that derive at least 50% of their revenue from the following segments: defense equipment, aerospace technology, communications systems and services, satellite technology, unmanned aerial vehicles, security software, IT hardware and services, cybersecurity software, training and simulation solutions, digital forensics, tracking devices, and e-authentication or biometric identification applications.

The index excludes violators of established global standards and any firm deriving revenue from controversial weapons.

The ETF comes with an expense ratio of 0.55%.

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