Europe’s first pure play drones ETF unveiled by HANetf
https://www.etfstream.com/articles/europe-s-first-pure-play-drones-etf-unveiled-by-hanetf
HANetf has extended its thematic ETF line-up with the launch of a strategy capturing drones and unmanned aerial vehicle (UAV) technology.
The Drone UCITS ETF (DRON) is listed on Borsa Italiana and Deutsche Borse, with a listing on the London Stock Exchange to follow. It has a a total expense ratio (TER) of 0.69%.
DRON tracks the VettaFi Drone UCITS index which casts a global net for stocks involved in drones and UAV technology.
Companies must derive at least 20% of revenues from drones or related technologies, or operate a dedicated UAV research programme.
Companies are divided into “pure-play” firms, generating at least 50% of revenue from drones, and “diversified” companies with smaller exposure.
Pure-play stocks account for 80% of the index, while diversified companies make up the remaining 20% and are capped at 5% each.
DRON’s top three holdings are Red Cat (24.1%), Ondas Inc. (16.7%) and Aerovironment (12.3%).
US drone technology company Red Cat and Florida-based autonomous drone systems provider Ondas Inc. are up 185.6% and 1,074.2%, respectively, over the last year. Aerovironment is up 61.6% over the same period.
Other less pure-play names appear in the basket, such as Boeing (1.2%) Lockheed Martin (0.98%), BAE Systems (0.53%) and Leonardo (0.51%).
Tom Bailey, head of research at HANetf, said global defence spending is shifting to reflect the growing dominance of drones on battlefields in Ukraine.
“The United States has launched a $1bn ‘Drone Dominance’ initiative, Germany plans to field more than 8,000 unmanned systems by 2029, and the UK has committed an additional £2bn to drone capabilities," Bailey said.
He also cited government use of drones for disaster relief, border security and infrastructure monitoring and commercial drone use as other key structural drivers.
Peter Diel, head of index product for Europe at VettaFi, added: "Autonomous systems deliver a real asymmetric advantage across a multitude of sectors, driving increased demand in areas ranging from supply chain optimization, entertainment and consumer products to fast-growing defense and security applications."
Other recent launches from the white-label ETF issuer include the Future of Defence Screened UCITS ETF (NATE), an ESG iteration of its $3bn global defence