<p>Investors last week flocked to exchange-traded funds tracking defence companies in the United States and Europe on expectations that the Israel-Hamas conflict could spill across borders.</p>.<p>The $5 billion iShares U.S. Aerospace Defense ETF saw net inflows of $7.2 million for the week ended Oct. 11, after seven straight weeks of outflows, according to Lipper data.</p>.<p>The $2 billion Invesco Aerospace Defense ETF attracted $48 million in net weekly inflows, its best showing since July 2022.</p>.Biden administration seeks emergency aid package for both Israel and Ukraine.<p>Both the funds jumped more than 4% last week as their top holdings Lockheed Martin and Northrop Grumman rallied 10% and 16%, respectively.</p>.<p>In Europe, the recently launched Future of Defence ETF saw weekly inflows of $1.1 million.</p>.<p>"Defence stocks rose on the back of the shock of last weekend's events ... for many investors it makes sense to have defense exposure as a hedge against geopolitical shocks," said Hector McNeil, co-CEO and founder of HANetf.</p>.<p>The bombardment of Gaza continued overnight, with residents saying it was the heaviest pounding yet in nine days of conflict.</p>.<p>Authorities in Gaza said at least 2,750 people had been killed in Israeli strikes that followed an attack by Hamas militants on the country on Oct. 7 that killed 1,300 people.</p>.<p>U.S. Secretary of State Antony Blinken was in the Middle East, with Iran warning of a regional escalation if attacks on Palestinians continue.</p>.<p>"If the fighting unfortunately endures longer, investors will further turn to weapons and defense suppliers," said Todd Rosenbluth, head of research at VettaFi.</p>.<p>The iShares and Invesco ETF have gained 5.7% and 14.2%, respectively, in the last two years on expectations of increased defence budgets, following the Russia-Ukraine conflict.</p>.<p>U.S. defence spending could grow at 4% above inflation in the medium-near term, compared to the historical 2%, analysts at BofA Research said in a recent note.</p>
<p>Investors last week flocked to exchange-traded funds tracking defence companies in the United States and Europe on expectations that the Israel-Hamas conflict could spill across borders.</p>.<p>The $5 billion iShares U.S. Aerospace Defense ETF saw net inflows of $7.2 million for the week ended Oct. 11, after seven straight weeks of outflows, according to Lipper data.</p>.<p>The $2 billion Invesco Aerospace Defense ETF attracted $48 million in net weekly inflows, its best showing since July 2022.</p>.Biden administration seeks emergency aid package for both Israel and Ukraine.<p>Both the funds jumped more than 4% last week as their top holdings Lockheed Martin and Northrop Grumman rallied 10% and 16%, respectively.</p>.<p>In Europe, the recently launched Future of Defence ETF saw weekly inflows of $1.1 million.</p>.<p>"Defence stocks rose on the back of the shock of last weekend's events ... for many investors it makes sense to have defense exposure as a hedge against geopolitical shocks," said Hector McNeil, co-CEO and founder of HANetf.</p>.<p>The bombardment of Gaza continued overnight, with residents saying it was the heaviest pounding yet in nine days of conflict.</p>.<p>Authorities in Gaza said at least 2,750 people had been killed in Israeli strikes that followed an attack by Hamas militants on the country on Oct. 7 that killed 1,300 people.</p>.<p>U.S. Secretary of State Antony Blinken was in the Middle East, with Iran warning of a regional escalation if attacks on Palestinians continue.</p>.<p>"If the fighting unfortunately endures longer, investors will further turn to weapons and defense suppliers," said Todd Rosenbluth, head of research at VettaFi.</p>.<p>The iShares and Invesco ETF have gained 5.7% and 14.2%, respectively, in the last two years on expectations of increased defence budgets, following the Russia-Ukraine conflict.</p>.<p>U.S. defence spending could grow at 4% above inflation in the medium-near term, compared to the historical 2%, analysts at BofA Research said in a recent note.</p>