U.S. Global Investors Launches WAR ETF: A New Frontier in Defense and Technology Investment

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On Tue, 31 Dec, 12:02 AM UTC

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U.S. Global Investors introduces the WAR ETF, an actively managed fund focusing on defense, aerospace, and advanced technologies like AI and cybersecurity, reflecting the growing intersection of technology and global security.

U.S. Global Investors Introduces WAR ETF

U.S. Global Investors, Inc. (NASDAQ: GROW), a registered investment advisory firm, has announced the launch of its first actively managed exchange-traded fund (ETF), the U.S. Global Technology and Aerospace & Defense ETF (NYSE: WAR). The fund, which began trading on the New York Stock Exchange on December 30, 2024, aims to capitalize on the increasing global demand for defense and protection through technological advancements 12.

Strategic Focus and Investment Approach

The WAR ETF is designed to offer diversified exposure to industries that help prevent and protect against the threat of war. It focuses on sectors including:

  • Semiconductors
  • Artificial Intelligence (AI)
  • Data centers
  • Cybersecurity
  • Aerospace
  • Electronic warfare

The fund employs a smart beta 2.0 investment strategy, combining quantitative and fundamental analysis to identify opportunities for long-term outperformance while managing risk 1.

Market Opportunity and Growth Potential

The launch of the WAR ETF comes at a time of significant growth in global military expenditures and technological advancements:

  • Global military spending reached a record $2.4 trillion in 2023, marking nine consecutive years of increase 12.
  • European Union member states are estimated to spend €326 billion ($342 billion) on aerospace and defense in 2024, representing 1.8% of the bloc's GDP 12.
  • The global semiconductor market is projected to surpass $1 trillion by 2030 12.
  • The global AI market is estimated to reach approximately $826 billion by 2030 12.

Management Perspective

Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors, emphasized the broader implications of the WAR ETF:

"The WAR ETF is more than just an investment in defense. From the 'war on drugs' to the iconic movie Star Wars, history has shown us the importance of defense against the forces that threaten peace. With advances in robotics, drones, satellites, AI and cybersecurity, the ETF aims to capture opportunities in these critical sectors that are transforming how we think about defense and security in the modern world." 12

Complementary to Existing ETF Suite

The WAR ETF joins U.S. Global Investors' existing lineup of thematic ETFs, including:

  • U.S. Global Jets ETF (NYSE: JETS), focused on airlines and air travel
  • U.S. Global GO GOLD and Precious Metal Miners ETF (NYSE: GOAU), focused on gold mining
  • U.S. Global Sea to Sky Cargo ETF (NYSE: SEA), focused on global shipping and logistics 1

Investment Considerations and Risks

While the WAR ETF presents opportunities in growing sectors, potential investors should consider several factors:

  • The fund is actively managed and new, with a limited operating history 12.
  • It is non-diversified, potentially concentrating assets in fewer holdings than a diversified fund 12.
  • Investments in aerospace, defense, cybersecurity, and semiconductor industries may be subject to intense competition, regulatory challenges, and rapid technological changes 12.
  • The fund may be exposed to risks associated with non-U.S. issuers and emerging markets 12.

The launch of the WAR ETF represents a significant move by U.S. Global Investors to capitalize on the growing intersection of technology and global security, offering investors a unique opportunity to participate in these rapidly evolving sectors.

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