BlackRock plans to launch Europe’s first active defence ETF to take advantage of arms manufacturers’ booming order books driven by a surge in government spending.

The world’s largest asset manager, with $15.4trn under management, has filed an intention to launch the Dublin-based exchange-traded fund with the Central Bank of Ireland.

The iShares Global Defence & Security Active UCITS ETF will be a variant of the $4n US-listed iShares Defense Industrials ETF, as first reported by ETF Stream.

It is the latest example of fund providers cashing in on investor interest in a sector stoked by European governments looking to increase the €400bn they spent on defence last year.

Military spending is forecast to reach 2.5% of European GDP this year prompting European investment providers to roll out 19 passive ETFs, including the $6.9bn Van Eck Defense Ucits ETF (DFNS) and $3.4bn HanETF Future of Defenced (NATO).

Last October Ark Invest launched the active ARK Space and Defense (ARKX) which has attracted £46n.

BlackRock’s existing US ETF holds 117 companies. Alongside US defence giants such as RTX Corp, the former Raytheon Technologies, and Lockheed Martin, it holds the UK’s Rolls Royce and BAE Systems.

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