REX Drone ETF Sees Inflows as Defense Spending Climbs

According to ETF Database, the REX Drone ETF (DRNZ) fund attracted approximately $11.28 million in inflows during the first week of the month. An additional $4.6 million arrived on July 7, bringing its five-day net inflows to $15.88 million.Key Takeaways The REX Drone ETF (DRNZ) secured $11.28 million in net inflows during the opening week of July 2026. The fund’s concentrated portfolio allocates heavily to pure-play UAV leaders, including AeroVironment (AVAV) and NextVision Stabilized Systems (NXSN).  Escalating global defense spending and supportive legislative initiatives continue to drive capital into thematic drone technology. Defense spending continues to rise around the world, and drones are playing a larger role in modern military operations. That trend has helped fuel interest in funds focused on unmanned aerial vehicles (UAVs).How the REX Drone ETF Works DRNZ tracks the VettaFi Drone Index (DRONES), which follows companies involved across the drone ecosystem. Unlike broader aerospace and defense ETFs, DRNZ focuses on businesses that generate a significant share of their revenue from drone-related products and services. The fund maintains a relatively concentrated portfolio, with its largest holdings focused on companies involved in defense technology, autonomous systems, and drone innovation.  As of July 8, its largest holding is AeroVironment AVAV, which represents 14.61% of the portfolio. The company is a leading developer of unmanned aircraft systems, loitering munitions, and autonomous technologies used by military and government customers.  NextVision Stabilized Systems (NXSN:TAE) accounts for 12.40% of the fund. The Israeli company specializes in stabilized electro-optical cameras designed for drones and other mobile platforms. They also supply advanced imaging solutions for defense and commercial applications.  Ondas Holdings (ONDS) makes up 11.29% of the portfolio. The company operates in autonomous drone technology and private wireless communications, with a growing presence in defense, public safety, and industrial infrastructure.  DroneShield (DRO), which represents 5.39% of the fund, develops counter-drone technologies that detect, identify, and mitigate unauthorized unmanned aerial systems, serving military, government, and critical infrastructure customers.  Red Cat Holdings (RCAT) rounds out the top five at 4.77%. The company focuses on military-grade drone platforms and related technologies, positioning itself as a supplier of unmanned aerial systems for defense and security operations.  See More: REX Drone ETF DRNZ Glides Past $100 Million AUM GoalpostGlobal Defense Spending Drives Drone Tech Demand The investment case for drones has strengthened over the past year. Governments are increasing defense budgets while expanding the use of autonomous systems for surveillance, intelligence gathering, logistics, and combat operations. The U.S. has also taken steps to strengthen domestic drone manufacturing and reduce reliance on foreign suppliers. Those efforts have increased investor attention on companies developing drone hardware, software, and related technologies. As military spending shifts toward autonomous technologies, many investors are looking for ways to gain targeted exposure to the theme. DRNZ provides one of the few ETFs dedicated specifically to companies building and enabling drone technology. The fund carries an expense ratio of 0.65%. For more news, information, and analysis, visit the Thematic Investing Content Hub. VettaFi LLC (“VettaFi”) is the index provider for DRNZ for which it receives an index licensing fee. However, DRNZ is 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 DRNZ.