Exposure to the global rise of unmanned aerial systems spanning commercial, civil and military use.
Our Partner
Warfare has permanently changed
Recent conflicts have demonstrated that low-cost unmanned systems can neutralise multi-million-dollar assets. Drones are now core to modern military doctrine, with governments are embedding unmanned systems into long-term defence planning. Military drone spending is projected to reach $216.5 billion over the next decade.¹
A dual-use technology scaling beyond defence
Unlike traditional defence hardware, drones are dual-use. The same autonomy, sensors and control systems apply across border security, disaster response, agriculture, industrial inspection and logistics. The civil UAS market is forecast to double by 2033, with commercial adoption expected to grow even faster.²
Pureplay exposure to an emerging aerospace segment
The ETF’s pureplay approach targets and overweights companies whose revenues are materially linked to unmanned systems and enabling technologies, providing more direct exposure to this structural shift.
¹,² Source: GSBR Research, Global Unmanned Aerial Vehicles (UAVs) Industry, Market Research Report, February 2026.
An emerging aerospace segment
Targeting companies whose revenues are materially linked to unmanned systems and enabling technologies may provide more direct exposure to this structural shift.
Defiance Drone UCITS ETF (DRON) provides exposure to companies positioned to benefit from growing demand for unmanned aerial vehicles (UAV) across three structural pillars: military and defence, civil government and public safety, and commercial and industrial adoption.
The ETF tracks a rules-based index designed to identify companies materially involved in the development, manufacture and enabling technologies of drone platforms, including autonomy software, navigation systems, sensors and propulsion components.
The Drone ETF tracks the VettaFi Defiance Drones UCITS Index. The index methodology follows a pureplay approach to reduce dilution from diversified aerospace and defence companies, seeking more direct exposure to companies whose revenues are meaningfully linked to unmanned systems.
Key Risks
Thematic ETFs are exposed to a limited number of sectors and thus the investment will be concentrated and may experience high volatility. When you invest in ETFs, your 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. Drone and UAV companies are closely tied to the economic fortunes of such companies’ research, design, manufacture, operation, or enabling technologies of drones and other unmanned aerial systems. The market for drone and UAV-related products and services is nascent, highly competitive, and characterized by rapid technological change, evolving regulatory frameworks, and heightened geopolitical sensitivities. Drone and UAV companies may derive a significant portion of their revenue from supplying drones, sub-assemblies, sensors, or software to military or intelligence customers. As a result, their financial performance is heavily dependent on national defence budgets, foreign-military-sales approvals, and shifting geopolitical priorities, any of which can be affected by changes in administrations, governmental funding allocations, multilateral treaty obligations, or fiscal austerity measures. Military-focused drone and UAV companies are also exposed to strict export-control regimes, heightened sanctions risks, and enhanced compliance obligations under anticorruption, anti-boycott, and anti-money laundering laws; violations or compliance failures can result in substantial fines, loss of export privileges, or debarment from future government contracts.
Source: HANetf, data as of 31.08.2026. Please note that all performance figures are showing net data. Performance before inception is based on back-tested data. Back-testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such a strategy would have been. Back-tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (”Prospectus”) before investing and should refer to the section of the Prospectus entitled ”Risk Factors” for further details of risks associated with an investment in this product. If fund is less than 12 months old, YTD field will be calculated since inception. When you invest in ETFs your capital is at risk.
No. of holdings: 45
Develops unmanned aircraft systems, loitering munitions and robotic systems for defence and government customers. Its platforms support intelligence, surveillance and reconnaissance missions, tactical strike capabilities and battlefield communications for US and allied forces.
Provides mission-critical wireless communications and autonomous drone solutions for defence, industrial and government users. Its technologies support secure data networks and aerial intelligence platforms used for surveillance, infrastructure monitoring and tactical operations.
Develops drone hardware, software and data solutions designed for military and public safety applications. Its systems focus on secure unmanned aerial platforms providing reconnaissance, situational awareness and intelligence capabilities for defence and homeland security users.
The Drone ETF tracks the VettaFi Defiance Drone UCITS Index, a rules-based index designed to capture companies materially exposed to the development, manufacture, and enabling technologies of unmanned aerial systems. Unlike broad aerospace or defence indices, the methodology differentiates between pureplay drone companies and diversified incumbents.
This approach seeks to balance thematic purity with investability and capacity, while avoiding excessive dilution from large defence primes.
Drone exposure refers to companies involved in the design, manufacturing, and operation of unmanned aerial vehicles (UAVs). This includes military, commercial, and logistics applications. The theme captures both defence modernisation and emerging civilian uses such as disaster relief, delivery services, and aerial inspections.
Companies are typically classified based on revenue from drone-related activities, technological capabilities, and market role. Core players often include UAV hardware manufacturers, AI and software developers, and platform operators, while peripheral players may provide supporting technologies or components.
Key risks include rapid technological change, regulatory shifts, defence budget fluctuations, and geopolitical tensions. Companies also face competition from traditional aerospace firms adapting to UAVs, and ethical considerations around military or surveillance applications.
Unlike general defence exposure, drone-focused companies are at the forefront of UAV technology. This theme often offers higher growth potential but can be more sensitive to technological shifts, government policy, and regulatory changes than traditional defence contractors.
Yes. Ethical concerns include the military use of drones, dual-use technologies, and privacy issues in surveillance. Screening frameworks may exclude companies involved in controversial practices and ensure compliance with ESG standards.
Civilian uses, such as emergency response, medical delivery, agriculture, and industrial inspections, provide revenue diversification and can accelerate technology adoption. However, they are subject to operational, regulatory, and safety risks.
Defence procurement and government contracts often represent significant revenue for drone companies. Changes in military budgets, procurement timelines, or export regulations can materially influence industry growth and company profitability.
Advances in autonomy, AI, sensors, communications, and battery technology drive innovation in drone performance and capabilities. Companies must continually adapt to maintain competitive advantage and access new markets.
Yes. Volatility arises from rapid technology evolution, regulatory changes, geopolitical events, and reliance on a small number of large contracts or clients. Market sentiment and emerging threats can also influence valuations and growth expectations.
A structured methodology ensures companies included are meaningfully involved in drone-related activities, helps distinguish core from peripheral players, manages concentration risk, and provides a rules-based approach for evaluating the sector’s growth and risk characteristics.
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.
Explore our expert-written monthly fund reports, periodic reviews, and key insights for the Drone ETF
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About Partner
Founded in 2018, Defiance ETFs is a leading U.S.-based ETF issuer specialising in thematic, income, and leveraged exchange-traded funds. With a track record of bringing innovative investment ideas to market quickly and effectively, Defiance has established itself as a first mover in several high-growth thematic categories, including AI, quantum computing, and leveraged single-stock ETFs.
The firm’s investment philosophy is grounded in identifying structural, long-term trends and translating them into accessible, liquid ETF products for investors worldwide. Led by a team of seasoned finance professionals with backgrounds at ProShares, BlackRock, and Direxion, Defiance brings deep expertise in ETF product development, capital markets, and investor education.
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