BRUSSELS, Jan 20 (Reuters) - Demand for a leading

defence sector exchange-traded fund (ETF) has been growing ahead

of the return of Donald Trump to the White House, said

investment company and ETF issuer VanEck.

The European arm of the New York-headquartered company

launched its VanEck Defense UCITS ETF in March 2023. It

rose around 55% in 2024 and is already up around 8% at the start

of 2025, with assets under management of around $1.8 billion.

"We are observing strong momentum in the defense sector.

Since the launch of our fund, we've experienced consistent

inflows with the ongoing global geopolitical tensions being the

main interest driver," said VanEck EU CEO Martijn Rozemuller.

Earlier this month, Trump said NATO members should spend 5%

of their gross domestic product on defence, a significant

increase from the current 2% target.

Officials and analysts have also told Reuters they expect

NATO to agree to go beyond this current defence spending target.

"As the political climate evolves, so too does investor

sentiment towards defense stocks. Just a few years ago, the

sector was taboo for most institutional investors. Today, with

supporting government policies, the contrast could not be

bigger," added Rozemuller.

The ETF's top holdings include Palantir Technologies ( PLTR )

, Thales, Booz Allen Hamilton ( BAH ) and

Leonardo.