"The Themes Transatlantic Defense ETF is riding a surge in defense spending that hasn't been seen for years, maybe decades. The fund holds a concentrated portfolio of U.S. and European defense contractors, with RTX, GE Aerospace, and Boeing making up nearly a quarter of assets. The ETF is already up 17.5% over the past month as defense budgets expand across NATO countries."
"What matters is when those budget increases flow through procurement cycles into actual contracts. Germany announced a €100 billion special defense fund in 2022, but contract awards have been uneven. Poland committed to raising defense spending to 4% of GDP, but the timeline for major platform purchases stretches across years. Watch for quarterly contract award announcements from NATO governments, particularly for long-cycle programs like fighter jets, missile defense systems, and naval vessels."
The Themes Transatlantic Defense ETF has surged amid a large increase in NATO defense spending, gaining 17.5% in the past month. The fund is concentrated in major U.S. and European defense contractors, with RTX, GE Aerospace, and Boeing comprising nearly a quarter of assets. NATO members pledged to meet or exceed 2% of GDP on defense after Russia's 2022 invasion, with some committing 3% or more. Budget pledges take 12 to 24 months to convert into procurement contracts, so contract awards and timing will determine revenue flow. Lockheed Martin suffered a major Q2 2025 earnings miss, illustrating execution and timing risks among contractors.
Read at 24/7 Wall St.
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