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1 Year of DRNZ: A Closer Look at Defense ETFs

BY | ETF Database
7:59 am ET 10/28/26 | 10 VIEWS
Thursday, October 29 is a big day for the REX Drone ETF (DRNZ). After all, this is the one-year anniversary for DRNZ, which launched on October 29, 2025.Key Takeaways: On Thursday, October 29, the REX Drone ETF (DRNZ) is celebrating its one-year anniversary. When looking under the hood of the fund’s approach, DRNZ offers vastly different investment exposure compared to a more traditional defense fund like the Invesco Aerospace & Defense ETF (PPA). Given that these two ETFs differ in geographic and market-cap exposure, they can work well in a conjoined portfolio. While timing the market is rarely deliberate, DRNZ ended up coming to the market ahead of a critical geopolitical moment. Tensions in Iran reached a boiling point at the end of February 2026, leading the public and private sector to look at the defense industry in a new light. Though the defense industry may be seeing increased attention as a whole, there are many different ways to construct one’s exposure to the industry. As an example, take a look at how DRNZ differentiates itself from something like the Invesco Aerospace & Defense ETF (PPA A-). See More: Why Invest in Defense? The Case for Targeted ExposureSame Industry, Different InvestmentsTo start, these funds already offer different investment focuses and philosophies. PPA is a broad fund that invests in a variety of different companies engaged in defense, aerospace, homeland security, space, and more. Meanwhile, DRNZ is a more specialized fund, allocating toward companies engaged in the drone and UAV industry. Furthermore, the funds diverge when it comes to geographic exposure. DRNZ is a global fund, while PPA primarily focuses on U.S. defense companies. The differences don’t stop with geography and investment thesis, either. DRNZ’s nuanced investment philosophy has led it toward a number of small- and midcap companies, such as Ondas and DroneShield, as of October 26, 2026. Meanwhile, PPA holds a number of key large-cap defense names, like Lockheed Martin, RTX, and Boeing, as of October 26, 2026. See More: 4Q26 Defense Sector Guide – Opportunities Amid InstabilityUse Case for DRNZ & PPAThese differences don’t require choosing one over the other. If anything, they make a strong case for owning both. With DRNZ and PPA offering contrasting market-cap exposure and geographic focus, the two funds complement each other well. Above all, defense ETFs are far less uniform than many investors assume, making it essential to look under the hood at fund composition before committing capital. And with the defense industry well-positioned to continue seeing interest and capital in the coming months, maintaining targeted exposure through a few ETFs could make sense. For more news, information, and analysis, visit the Investing in Defense Content Hub. Invesco Distributors, Inc. is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Invesco Distributors, Inc., nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles. VettaFi LLC (“VettaFi”) is the index provider for PPA and DRNZ, for which it receives an index licensing fee. However, PPA and DRNZ are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of PPA and DRNZ.

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