VanEck has announced it will launch an ASX-listed ETF focused on global defence stocks.
The VanEck Global Defence ETF is currently in its “final stages of preparation”, ahead of ASX trading. The provider said it offers investors an opportunity to invest in stocks which are typically unavailable to retail investors.
The business already runs a European UCITS-listed Defense UCITS ETF, which was launched at the end of March 2023 and is US$1 billion in size. Its largest exposures include US software company Palantir, US national security company Leidos, and US military contractor Booz Allen Hamilton.
It has outlined three reasons that defence companies are attractive investments:
- Defence expenditure commitments from global governments provide certainty and are typically mandated. More recently, the ongoing geopolitical environment has led to increased spending.
- The persistent expansion of global military expenditure has been a reliable trend and it is diversified across geographies.
- The defence industry has historically been at the forefront of technological development and advancement.
VanEck currently runs a range of thematic ETFs including pharmaceuticals, robotics, gaming and green infrastructure.
Earlier this year, the ETF provider added four new hires as it tries to increase its market share with financial advisers.
Connor Goggins joined VanEck’s business development and client solutions team from Bloomberg as its newest business development associate. In its product and marketing teams, the firm hired Jenneth Orantia, Jessica Nightingale and Emily Wang.
Speaking in June, Arian Neiron, chief executive of VanEck and managing director for Asia-Pacific, said there is room for the firm to grow its presence with advisers as ETFs are tipped to grow to $220 billion by the end of 2024.
“Demand is ramping up as advisers get better acquainted with the opportunities our investment strategies bring.
“However, there’s still a lot of room to grow. ETFs currently make up only a fraction of the total $4.75 trillion of funds under management in Australia. Our market-leading ETF strategies have the potential to capture a much bigger slice of the pie, and our new hires will help bolster our efforts to achieve that growth.”
