HANetf head of research Tom Bailey talked with Proactive's Stephen Gunnion about the performance and outlook for the Future of Defence UCITS ETF (LSE:NATO), which has reached approximately £2.7 billion in assets under management, up from £700 million at the start of the year. He attributed this growth to geopolitical developments, including rising defence spending commitments from European NATO members and increasing investor focus on security.
Bailey explained that the ETF combines exposure to traditional defence companies and cybersecurity firms. “The inclusion of cybersecurity stocks within our defence strategy, we think, has been validated by this move,” he said, referring to NATO’s new 5% spending target adopted at the recent summit in The Hague.
In addition, Bailey discussed the planned launch of a new ETF focused on the Indo-Pacific region. He outlined that this fund will target defence companies in India, South Korea, Japan, Taiwan and Australia, while excluding Chinese firms due to sanctions risk. He noted that defence budgets in the region remain relatively low compared to NATO countries, but commitments to increase spending are gaining momentum.
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