The 2026 NATO summit in Ankara concluded this week with sweeping announcements that sent shockwaves through global defense markets and reshaped alliance burden-sharing expectations.
U.S. President Donald Trump made clear that European allies can no longer unconditionally count on American protection, forcing member states to aggressively step up their own commitments.
NATO allies officially announced more than €50 billion, approximately $57 billion, in new defense procurement deals, separate from a €70 billion military aid pledge for Ukraine.
This unprecedented wave of spending is widely expected to ignite a long-term bull run for global defense contractors and the ETFs that hold them.
Europe’s accelerating push toward strategic autonomy emerged as the central theme of the Ankara summit, driven largely by Washington’s increasingly transactional view of the alliance.
Total defense and security spending by European allies and Canada has already reached around 4% of GDP, just one year into a 10-year project aimed at hitting 5% of GDP by 2035.
Lockheed Martin (LMT) joined forces with German defense prime Rheinmetall (RNMBY) to establish the first European facility for manufacturing, integration, and distribution of ATACMS tactical missiles at Rheinmetall’s artillery plant in Germany.
RTX Corp. (RTX) announced plans to double its Stinger missile production through European partnerships, while allies also launched NATO’s Drone Edge initiative with $40 billion earmarked for counter-uncrewed systems over five years.
The summit further highlighted procurement of Northrop Grumman (NOC) Triton uncrewed aircraft to enhance NATO’s maritime surveillance and joint procurement of Saab GlobalEye aircraft to modernize NATO’s airborne early warning capabilities.
Rather than betting on individual defense primes, analysts argue that defense ETFs offer a smarter strategy by mitigating single-stock volatility while capturing the full rising tide of global military modernization.
The iShares U.S. Aerospace & Defense ETF (ITA), with net assets of $14.27 billion, offers exposure to 49 U.S. companies and has surged 27.8% over the past year, charging 38 basis points in fees.
RTX holds the second spot in ITA with 15.41% weightage, LMT holds the seventh spot with 4.25% weightage, and NOC holds the eighth spot with 4.25% weightage.
The Invesco Aerospace & Defense ETF (PPA), with a market value of $8.24 billion, covers 62 companies involved in U.S. defense, homeland security, and aerospace operations, gaining 22.9% over the past year.
RTX leads PPA with 7.47% weightage, LMT holds the fourth spot at 5.98%, and NOC occupies the sixth position at 4.75%, with the fund charging 58 basis points in fees.
The Themes Transatlantic Defense ETF (NATO), carrying a NAV of $40.74, offers exposure to 85 aerospace and defense companies headquartered in NATO member countries and has rallied 13% over the past year.
RTX holds the second position in the NATO fund at 7.79%, LMT sits fifth at 5.26%, Airbus holds sixth at 5.14%, and NOC rounds out the top ten at 3.50%, with fees of just 35 basis points.
