Palantir Among Key Picks As BlackRock Launches Active Defense Industrials ETF

As geopolitical tensions gel into long-term realities, BlackRock is making battlefield dynamics into an investment theme. The world’s biggest asset manager introduced on Wednesday the iShares Defense Industrials Active ETF (NASDAQ:IDEF), a new actively managed fund designed for those interested in aligning portfolios with the changing shape of global defense and security.

The fund’s portfolio includes GE Aerospace (NYSE:GE), RTX Corp (NYSE:RTX), and Palantir Technologies (NASDAQ:PLTR) among its top holdings.

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IDEF seeks to do more than a traditional defense play. The ETF combines macroeconomic research with alternative sources of data, such as defense revenue exposure and contract flow, to create a responsive portfolio to rapidly changing global trends.

The actively managed ETF is timed with defense expenditures reaching record levels, $2.7 trillion worldwide in 2024, a 9.4% increase from the previous year and over twice the levels in 2000. Behind the fronts of increasing military budgets is a wider economic realignment: governments are rebalancing national priorities, reshaping supply chains, and sprinting to capture key technologies.

IDEF complements BlackRock’s growing roster of active and thematic ETFs, such as the iShares U.S. Aerospace & Defense ETF (BATS:ITA) and iShares Cybersecurity and Tech ETF (NYSE:IHAK). But whereas those are passive index offerings, IDEF adds an active element of judgment and responsiveness, attributes that can be beneficial in a world where uncertainty is on the rise.

At launch, BlackRock isn’t simply reacting defensively as a trend, it’s setting defense as a structural corner of the new economy. And as military strategy becomes increasingly interconnected with technology and supply chain security, the company is taking a bet that defense exposure is no longer only for generals or government budgets, it’s for portfolios as well.

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