Future of Defence UCITS ETF – Acc (NATO.MI)

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The Future of Defence UCITS ETF (NATO) offers investors targeted access to companies poised to profit from the escalating defense and cyber defense expenditures by NATO member states and their allies. Global military spending is currently experiencing an unprecedented rise, with a record $2.7 trillion allocated to defense in 2024, making it the highest per capita spending observed since 1990. NATO nations have spearheaded this trend, significantly increasing their defense budgets by 8.9% last year. This growth is projected to continue; in 2025, NATO members collectively agreed to a target of 5% of GDP for defense spending by 2035. This future allocation includes 3.5% for conventional defense capabilities and 1.5% for broader security areas like cyber and network protection. The ETF aims to passively track the EQM NATO+ Future of Defence Index, which is constructed using a systematic, rules-based approach. The index comprises companies that either derive over 50% of their revenue from manufacturing military aircraft and/or defense equipment, or have cybersecurity contracts with a NATO+ member country.