VanEck, a prominent investment firm and exchange-traded fund (ETF) issuer, has reported a significant increase in demand for its VanEck Defense UCITS ETF, driven by escalating global geopolitical tensions and the potential return of Donald Trump to the White House.
Launched in March 2023, the VanEck Defense UCITS ETF has seen remarkable growth, appreciating approximately 55% in 2024. The fund has maintained its upward trajectory in 2025, showing an early 8% increase, and now holds assets under management (AUM) totaling $1.8 billion.
Martijn Rozemuller, CEO of VanEck EU, noted that the ETF’s strong momentum aligns with the current geopolitical climate. “Since the fund’s launch, we’ve witnessed consistent inflows, with global geopolitical tensions acting as the primary driver of interest,” Rozemuller explained.
The surge in demand comes as political leaders, including former U.S. President Donald Trump, have suggested significant changes to defense spending policies. In early January, Trump proposed that NATO members increase defense spending to 5% of their gross domestic product (GDP), a substantial rise from the current 2% target. This shift in rhetoric has sparked speculation among officials and analysts that NATO may soon adopt more aggressive defense spending goals.
Rozemuller observed the changing dynamics in defense sector investments: “Investor sentiment towards defense stocks has evolved dramatically. Not long ago, defense was a sector largely avoided by institutional investors. Today, with favorable government policies and heightened security concerns, the contrast in sentiment could not be clearer.”
The VanEck Defense UCITS ETF’s portfolio includes leading defense and technology companies such as Palantir Technologies, Thales, Booz Allen Hamilton, and Leonardo, all of which stand to benefit from increased defense spending.
As geopolitical uncertainties continue to drive market shifts, the defense sector appears poised for continued growth, with ETFs like VanEck’s providing investors an opportunity to capitalize on these trends.
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