Despite the market turbulence caused by President Trump’s recent actions, the Yuanta Aerospace & Defense ETF (00965) focusing on military themes has shown remarkable resilience. Today, the ETF broke through the 18-dollar mark, reaching a new high, with an increase of nearly 20% from its November 2024 offering price of 15 dollars. This year alone, it has surged by 23.6%, securing its position as the leading ETF in terms of growth.

Statistics indicate that only three stock ETFs have maintained double-digit growth this year, among which 00965 stands out with an impressive return of 23.64%, significantly outperforming the broader market and other leading ETFs.

The Yuanta Aerospace & Defense ETF research team notes that the movements of global defense-related stocks are highly correlated with the defense budgets of key nations. The U.S. recently approved a tax reform bill that allows for an additional $150 billion in defense spending, establishing that the U.S. defense budget will exceed $1 trillion by 2026, with an annual growth rate of 13%. Similarly, the European Union agreed on the 19th to initiate a joint procurement loan fund of 150 billion euros to support members in procuring defense equipment, enhancing their defense capabilities.

Amid ongoing global geopolitical conflicts, the demand for high-tech military equipment such as drones, counter-drone systems, and air defense systems remains strong, further driving countries to strengthen their defense stockpiles, thus continuing to spur growth in defensive concept stocks.

In reviewing the performance of major U.S. ETFs this year, others such as the Unified FANG+ (-7.3%), Fubon NASDAQ (-9.1%), and Yuanta S&P 500 (-9.4%) have lagged behind defense-themed ETFs.