HANetf is set to launch its Future of Defence UCITS ETF, offering investors access to firms generating revenues from NATO and NATO ally military and cyber spending.

The ETF, which will launch on 4 July, will track the EQM Future of Defence index, with HANetf touting the opportunities that have arisen following the Russian invasion of Ukraine.

Firms in the ETF must derive more than 50% of their revenues from the manufacture and development of military aircraft and defence equipment, or have business operations in cyber security contracted with a NATO member or NATO ally.

The maximum exposure by country is 50%, a measure which aims to provide a more diversified global exposure. 

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While traditional military spending has begun to rise as NATO countries aim to hit the 2% of GDP target for defence spending, HANetf also emphasised the importance of cybersecurity, with the ETF bringing both together.

A recent survey from HANetf found that 78% of wealth managers said geopolitics had become more important when engaging in fund selection over the past year.

The ETF will list on the London Stock Exchange and Deustche Börse XETRA, and will list on Borsa Italiana later next month.

Hector McNeil, founder and co-CEO of HANetf, said the ETF was "unique" as other defence related funds "tend to be industrials heavy and not focused on NATO and its allies".

He added: "Whether it is the ongoing war in Ukraine or the growing risk of conflict over Taiwan or the South China Sea, it is clear the world is becoming a riskier place.

"After years of underspending, NATO members in Europe are finally taking their share of defence spending seriously. Poland, for example, is now aiming to spend 4% of its GDP on defence and potentially build the largest land army in Europe.

"But it is not just spending on tanks and missiles. Cyberspace is now a new domain of warfare, which it has clearly been since both the 2014 and 2022 Russian invasions of Ukraine, which saw the latter relentlessly targeted by state-sponsored cyber-attacks."