Despite ongoing market fluctuations driven by President Trump's policies, the Yuanta Aerospace and Defense Technology ETF (00965) is performing remarkably well. Today, this ETF surpassed 18 TWD, setting a new high, and has increased nearly 20% from its issuance price of 11 TWD in 2024, with a year-to-date surge of 23.6%, solidifying its position as the top-performing stock ETF.

Statistics show that only three stock ETFs this year have maintained double-digit growth, including 00965, Yuanta's Europe 50 (00660), and Fubon Europe's (00709). Among these, 00965's 23.64% returns stand out, significantly outperforming both its peers and the broader market.

The research team of Yuanta Aerospace and Defense Technology ETF (00965) points out that global defense stocks are heavily correlated with national defense budgets. On the 22nd, the US passed a tax reform bill that agreed to increase the defense supplemental budget by $150 billion, confirming that the US defense budget will exceed $1 trillion by 2026, with an annual growth rate of 13%. Similarly, the EU agreed on the 19th to initiate a joint weapon procurement loan fund of €150 billion, providing low-interest loans to support member states in purchasing defense equipment.

On the demand side, ongoing geopolitical conflicts and the growing need for high-tech equipment such as drones, anti-drone systems, and air defense technologies continue to drive nations to bolster their defense inventory, sustaining the momentum for global defense stocks.

The performance of major US ETFs this year has been as follows: Unified FANG+ (00757) down 7.3%, Fubon NASDAQ (00662) down 9.1%, Yuanta S&P 500 (00646) down 9.4%, and Cathay Philadelphia Semiconductor (00830) down 20.6%, all underperforming compared to defense-themed ETFs.

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