LONDON, April 15 (Reuters) - Fund manager VanEck's

defence-industry focused exchange traded fund (ETF) has reached

more than $550 million in net assets in its first year, VanEck

said on Monday, highlighting how current, global conflicts have

driven investors to the defence sector.

The New York-headquartered firm launched its VanEck Defense

UCITS ETF at the end of March 2023. The ETF is up

around 20% in 2024, and has reached around $560 million in net

assets within a year.

The war in Ukraine and the conflict between Israel and

Hamas, which has also drawn in Iran, has led many governments to

call for more military spending.

In April, British Foreign Minister David Cameron called for

NATO allies to bolster defence spending and production to

support Ukraine against Russia, while Israel has also amended

its budget to add more spending on defence.

"Traditionally, the defence industry has been a rather

sensitive topic, especially in Europe. However, the outbreak of

war in Ukraine and other areas of tension and conflict around

the world have changed the way many people view defence policy,"

said VanEck Europe CEO Martijn Rozemuller.

The ETF's top holdings are French stocks Thales

and Safran, while others include Italian company

Leonardo and U.S. defence technology company Booz

Allen Hamilton ( BAH ).

Earlier this month, Goldman Sachs' strategists said they

were not recommending European defence stocks due to their

recent outperformance, with the STOXX Europe aerospace and

defence index up around 27% in 2024 - outpacing a 5%

percent gain for the broader STOXX Europe index.

Nevertheless, APICIL Asset Management fund manager Gregoire

Laverne said defence stocks remained long-term top picks, given

the global, political situation.

"We think defence remains a must-have in fund managers'

portfolios, given how governments not only in Europe but across

the world are not stopping in their increases to military

spending," added Laverne, whose firm owns Thales and Safran.