ETF Prime: Defense ETFs Draw Billions Amid Global Tensions

Core Insights - The defense ETF sector has rapidly expanded, now comprising approximately 22 pure-play ETFs with around $42 billion in assets and $9 billion in net inflows this year, driven by rising geopolitical tensions [3][10] Defense ETF Growth - The defense ETF category has seen significant growth since late 2024, increasing from 13 ETFs and $14.5 billion in assets to the current figures [3] - Traditional U.S. defense ETFs remain popular, with the Invesco Aerospace & Defense ETF (PPA) holding nearly $8 billion in assets and the iShares U.S. Aerospace & Defense ETF (ITA) being the largest with $13 billion in assets [4] New Launches and Performance - Eight out of nine new defense ETF launches since 2025 have been global or international offerings, indicating a shift in investor interest [5] - The Global X Defense Tech ETF (SHLD) has over $8 billion in assets, with $6 billion gathered in the past year, while the Select STOXX Europe Aerospace & Defense ETF (EUAD) rose 74% last year [5] - Defense ETFs have shown resilience during recent market pullbacks, performing relatively strong compared to the S&P 500 [7] Emerging Subcategories - Space and drone subcategories are gaining attention, with the Procure Space ETF (UFO) holding $360 million in assets and drone ETFs like the REX Drone ETF (DRNZ) and the Defiance Drone and Modern Warfare ETF (JEDI) each holding just over $80 million [6] Money Market ETF Launch - The ProShares Genius Money Market ETF (IQMM), launched in late February, has reached $22 billion in assets and is the first money market ETF designed to meet Genius Act requirements for stablecoin reserves [8][10]