Hedging Geopolitical Risks With Defense ETFs

Hedging Geopolitical Risks With Defense ETFs

Gabelli’s Bancroft discusses the outlook for defense spending and the case for investing in defense-related ETFs.

Reviewed by: etf.com Staff
Edited by: Kent Thune

Defense spending has been growing faster than GDP in recent years, a trend that will likely continue in light of recent global conflicts.

In this episode of Talk ETFs, Tony Bancroft, portfolio manager at Gabelli Funds, sits down with etf.com senior analyst Sumit Roy to discuss defense ETFs, as well as broader trends in the defense and commercial aerospace industries.

Bancroft notes that spending on defense in the U.S. is set to grow 3% to 3.5% in 2024.

“Defense spending has definitely been on a rise, and based on what happened on Feb. 2022 and what just happened on Oct. 7, all things being equal, [that will lead to] higher defense spending.”

To capitalize on this growth in defense spending, Bancroft recommends that investors consider defense-related ETFs, such as the Gabelli Commercial Aerospace & Defense ETF (GCAD), which launched at the start of 2023.

Lieutenant Colonel Tony Bancroft joined Gabelli in 2009 as an associate in the alternative investments division. He previously served in the United States Marine Corps Reserve as an F/A-18 Hornet fighter pilot. Currently, he's a PM on the GCAD ETF as well as an analyst covering the aerospace and defense and environmental services sectors with a focus on suppliers to the commercial, military and regional jet aircraft industry and waste services.

Talk ETFs is a weekly video series hosted by etf.com’s Senior Analyst Sumit Roy. Episodes highlight up-to-the-minute investing trends and strategies with commentary from leading experts in the ETF industry.