Exposure to Indo-Pacific defence companies, ex-China.
Our Partner
Rising defence budgets across Asia
Indo-Pacific nations are increasing military spending to counter rising regional threats. The Indo-Pacific Defence ETF aims to capture the companies at the heart of the region’s largest rearmament drive since the Cold War.
Local industry over imports
Countries like India, Japan, and South Korea are prioritising self-reliance by investing in domestic defence production. This shift from imports to local sourcing may offer a compelling opportunity for regional defence manufacturers.
Pure-play regional exposure
Targeted exposure to listed defence companies across the Indo-Pacific, with China excluded. From aerospace, to cyber, to naval tech – the Indo-Pacific Defence ETF aims to offer pure-play access to a distinct and fast-growing defence market.
Strategic importance
The Indo-Pacific has become the primary theatre of global geopolitical competition, especially amid growing tensions between China and its neighbours.
Indo-Pacific nations are increasing military spending, resulting in the region’s largest rearmament drive since the Cold War.
Kotak Indo-Pacific Defence UCITS ETF (QUAD) aims to provide exposure to Indo-Pacific defence spending, ex-China.
China’s military expansion has kick-started the most significant rearmament drive in the Indo-Pacific since the Cold War. In response, countries from India to Japan are not only increasing defence budgets but also accelerating efforts to localise arms production.
This shift – from imports to domestic sourcing – presents a growing opportunity for Indo-Pacific defence companies.
Key Risks
Thematic ETFs are exposed to a limited number of sectors and thus the investment will be concentrated and may experience high volatility. Investors’ capital is fully at risk and may not get back the amount originally invested. Exchange rates can have a positive or negative effect on returns. For a complete overview of all the risks, please refer to the »Risk Factors » in the Prospectus.
Rebalance Calendar
NAV History
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No. of holdings: 43
Manufacturers defence vehicles such as main battle tanks, armoured recovery vehicles, and related defence equipment. Has emerged as a key supplier of military equipment to Poland.
Manufacturer of electronic products and systems for the Indian Army, Navy, and the Air Force, including night vision goggles, periscopes, gunsights, transmitters and receivers, radar, and tank electronics.
Heavy machinery manufacturer for military including naval ships and submarines, defence aircraft, helicopters, guided weapon systems, and defence aero engines. It also produces the Mogami frigate.
Air, land, and sea defence solutions. Command, Control, Communications and Computers, Cyber, Intelligence, Surveillance and Reconnaissance (C5ISR) platforms.
Companies must be listed defence companies from ten Indo-Pacific countries (excluding China) that generate over 20% of revenue from defence-related activities such as military equipment, naval shipbuilding, defence electronics, and cybersecurity.
Companies are classified as:
Core: ≥50% defence revenue
Non-core: 20–49% defence revenue
Exception: Naval shipbuilders with ≥$3bn defence revenue, regardless of percentage
Weightings are based on free-float market capitalisation, with caps to ensure diversification:
Core companies are capped at 10%
Non-core companies at 5%
All companies must have a minimum 0.2% weight
This approach aims to ensure focused, diversified exposure to the Indo-Pacific defence sector.
The VettaFi Future of Defence Indo-Pac ex-China Index rebalances quarterly.
Indo-Pacific defence refers to the military capabilities and security infrastructure of countries in the region, such as India, Japan, South Korea, Australia, Taiwan, and Singapore. It includes land, air, naval systems, and associated defence industries. China is typically excluded in analyses to focus on regional allies.
The region hosts significant geopolitical tensions, including territorial disputes, maritime security challenges, and strategic competition. Growing defence investment supports national security, regional stability, and alliance commitments among Indo-Pacific nations.
National governments allocate budgets based on GDP, perceived threats, territorial disputes, modernisation needs, and participation in regional alliances. Spending covers personnel, equipment procurement, R&D, and operational readiness.
Countries focus on naval fleets, air defence, advanced weapon systems, drones, cyber capabilities, and surveillance technologies. Modernisation often targets rapid-response, interoperability, and maritime security.
Rising tensions or disputes can accelerate procurement and modernisation programs, prompting increased investment in naval, air, and land systems as countries strengthen deterrence and readiness.
Cooperation among QUAD nations (India, Japan, Australia, US) and regional partners enables joint exercises, shared R&D, coordinated responses to threats, and interoperability of systems, enhancing collective security.
Yes. Autonomous systems, drones, cybersecurity, AI, and advanced sensors are increasingly integrated into defence strategies. Technology adoption improves situational awareness, operational efficiency, and strategic deterrence.
Risks include regional conflicts, delays in procurement programs, technological obsolescence, supply chain challenges, and variations in government funding or policy priorities.
Strong defence capabilities among key Indo-Pacific nations support regional stability, contribute to alliance strategies, and serve as a strategic counterbalance in the wider Indo-Pacific, affecting trade routes and international security dynamics.
The region is modernising with investment in naval, air, and cyber capabilities, integrating autonomous and high-tech systems, and emphasising interoperability and readiness to respond to emerging threats.
Disclaimer: These FAQs have been generated with the assistance of AI and may contain errors or omissions. They are provided for general information only and do not constitute investment advice, a recommendation, or an invitation to buy or sell any investment.
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About Partner
Kotak Group, one of India’s leading financial services conglomerates, was established in 1985 and manages a consolidated AUM of USD 87.55 billion as of 31 Dec 2025. The group is recognised for its strong capabilities across commercial banking, personal finance, securities broking, investment banking, asset management, life & general insurance and wealth management.
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