Geopolitical risks have escalated globally, signalling that we’re in a new geopolitical regime.
While these conflicts have presented themselves as a persistent market risk, they’ve also created unprecedented opportunities for investors.
In this article, we explore 3 ETFs investors looking to protect portfolios against rising geopolitical risks can consider.
iShares U.S. Aerospace & Defense ETF (ITA)
| Assets under management (AUM) | 6.1B |
| Average daily trading volume | 432,929 |
| Expense ratio | 0.40% |
With an AUM of $6.1B, the iShares U.S. Aerospace & Defense ETF is one of the larger aerospace and defense ETFs available on the market. It seeks to replicate the Dow Jones U.S Select Aerospace & Defense Index composed of U.S equities in the aerospace and defense sector.
As of May 2024, the fund is made up of 35 holdings, and its top 10 holdings, accounting for 76.80% of its total assets, are led by the following companies:
- RTX Corp
- Boeing
- Lockheed Martin Corp
- TransDigm Group Inc
- Textron Inc
- Northrop Grumman Corp
- General Dynamics Corp
- Howmet Aerospace Inc
- Axon Enterprises Inc
- L3Harris Technologies Inc
iShares MSCI Global Gold Miners ETF (RING)
| Assets under management (AUM) | 466.54M |
| Average daily trading volume | 122,211 |
| Expense ratio | 0.39% |
The iShares MSCI Global Gold Miners ETF provides investors exposure to companies primarily engaged in the business of gold mining.
As of May 2024, the top 10 holdings of the fund are:
- Newmont
- Agnico Eagle Mines Ltd
- Barrick Gold Corp
- AngloGold Ashanti PLC
- Gold Fields Ltd
- Zijin Mining Group Ltd H
- Kinross Gold Corp
- Wheaton Precious Metals Corp
- Alamos Gold Inc Class A
- Harmony Gold Mining Company Limited
Gold has generally been regarded as a safe haven asset, with its prices often rallying during times of geopolitical tension. This makes it a good option for investors looking to hedge their portfolios against increasing global uncertainty.
iShares Gold Trust (IAU)
| Assets under management (AUM) | 28.44B |
| Average daily trading volume | 7.69M |
| Expense ratio | 0.25% |
The IAU ETF was introduced by iShares in 2005 and is designed to track the performance of the LBMA Gold Price Index.
The fund seeks to reflect the performance of the price of gold and holds physical gold bars in secure vaults in New York, Toronto, or London, allowing investors to avoid the hassle of having to store the physical metal.
The fund has an AUM of 28.44B and an average daily trading volume of 7.69M, making it the largest and most liquid ETF featured here. It has an expense ratio of 0.25% and each share of the fund represents a specific amount of gold.
