HANetf has announced the launch of the Future of Defence Indo-Pacific ex-China UCITS ETF (ticker: QUAD).
The firm writes that the new ETF will provide targeted exposure to Indo-Pacific-listed companies engaged in defence, aerospace, and security, complementing HANetf’s existing range, which includes the Future of Defence UCITS ETF (ticker: NATO) – now exceeding USD2.8 billion in assets under management (AUM) – and the Future of European Defence UCITS ETF (ticker: ARMY), with over EUR160 million in AUM. With this expansion, HANetf writes that it will offer investors the most comprehensive set of tools in Europe to access defence.
As with Europe, the Indo-Pacific region is undergoing a significant shift in its defence posture. At the recent Shangri-La Dialogue in Singapore, U.S. Defense Secretary Pete Hegseth urged America’s Asian allies to follow Europe’s lead on rearmament. “NATO members are pledging to spend 5 per cent of their GDP on defence – even Germany,” he noted, highlighting the scale of Europe’s recent military shift.
As Indo-Pacific nations confront similar geopolitical risks, governments from India and Japan to South Korea and Taiwan are not only increasing defence budgets but also accelerating the localisation of military production and reducing reliance on foreign imports, the firm says.
Key regional dynamics include:
India directing 75 per cent of its defence capital budget to domestic manufacturers.
Japan initiating its largest military build-up since the 1950s, including easing export restrictions and targeting 2 per cent of GDP defence spend by 2027.
South Korea expanding its defence exports, aiming to capture 5 per cent of the global arms market by 2027.
Taiwan increasing its defence budget by nearly 50 per cent since 2015, including investment in indigenous drone and anti-drone technology.
However, many investors in defence are missing exposure to this, HANetf says, having analysed the Indo-Pacific exposure of every European-listed UCITS ETF with a global defence remit. The findings point to a gap:
Exposure to Indo-Pacific defence stocks across European-listed global defence ETFs is limited, they say, with the average allocation across each ETF standing at just 3.55 per cent, with a median of 3 per cent. For such a vital region, this potentially represents a notable gap in many investors’ portfolios, the firm says.
Exposure to US and European defence firms remains essential, especially with surging spending from NATO members. But portfolios dominated by Western holdings may not fully reflect the structural rearmament story unfolding across the Indo-Pacific.
As the strategic weight of global security continues to shift eastward, investors may want to consider whether their portfolios are aligned with this long-term geopolitical transformation.
Hector McNeil, Co-Founder and Co-CEO of HANetf, says: “The Indo-Pacific is fast becoming the centre of gravity for global geopolitics. From the Taiwan Strait to the South China Sea, from border clashes in the Himalayas to the rise of new alliances like AUKUS and the Quad, this region is at the heart of the 21st century’s security challenges. The launch of the Future of Defence Indo-Pacific ex-China UCITS ETF (QUAD) reflects our commitment to offering investors precise, forward-looking exposure to the regions and sectors reshaping the geopolitical landscape. With QUAD, we are filling a critical gap in European portfolios – providing access to the defence build-up across key Indo-Pacific democracies. This launch cements HANetf’s position as Europe’s most comprehensive platform for accessing the global defence theme.”
newETFs.io respects the hard work of others and gives all credit to the remarkable folks at ETFexpress.com. This excerpt/article was pulled from their RSS feed; click here to view the original. Please note that on occasion, the RSS feed will not have the author. When this happens this site defaults the author to "News". Make no mistake, this excerpt/article was not created by newETFs.io, it was simply shared with you.
