Focused high growth defence themed ETF with strong recent gains and concentrated risk exposure
Report created on May 4, 2024Risk profile
5/7
Diversification profile
3/5
Positions
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NA HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
NATP - IE000OJ5TQP4 100.00%
The portfolio is extremely straightforward: one single ETF holding makes up 100% of the allocation. That ETF invests fully in stocks, so there is no built‑in exposure to bonds, cash, or alternative assets. A single‑fund structure is easy to monitor and rebalance, but it also means all outcomes depend on the fortunes of this specific theme. When one vehicle drives everything, there is no internal cushion from other asset types that might behave differently. For someone using this as a core holding, a useful takeaway is to think about what might complement this ETF rather than assuming it covers all bases.
Growth
Over the period from mid‑2023, $1,000 grew to about $2,304, giving a compound annual growth rate (CAGR) near 36%. CAGR is like an average yearly speed on a long road trip, smoothing out bumps. This easily beat both the US and global equity markets, which returned around 16% annually over the same span. Interestingly, the portfolio’s maximum drawdown of roughly -12% was also smaller than the benchmarks’ steeper drops. That combination of high return with relatively moderate drawdowns has been excellent, but it’s based on a short, unusually strong period, so it should not be assumed to continue indefinitely.
Asset classes
- Stocks 100%
All of the portfolio sits in equities, with 0% in bonds, cash, or other asset classes. Equity‑only allocations typically offer higher long‑term growth potential but also greater sensitivity to market swings and economic cycles. Many diversified portfolios blend stocks with steadier assets to cushion drawdowns and smooth the ride. Here, every dollar shares the same broad risk type. For someone comfortable with meaningful ups and downs in pursuit of growth, that can be acceptable, but it does leave no built‑in defense if stock markets hit a prolonged rough patch.
Sectors
- Industrials 70%
- Technology 30%
Sector exposure is highly concentrated: about 70% in industrials and 30% in technology. That’s very different from broad stock market indices, which usually spread more evenly across financials, healthcare, consumer businesses, and more. Defence, aerospace, and cyber‑security names dominate, tying performance closely to defence budgets, geopolitical tensions, and government contracts, as well as tech spending cycles. Such a focused sector profile can outperform when those areas are in favor but can lag sharply if regulation changes, budgets get cut, or sentiment turns. The current mix is well aligned with a defence theme, but not with broad‑based sector diversification.
Regions
- North America 62%
- Europe Developed 29%
- Asia Developed 5%
- Africa/Middle East 3%
- Europe Emerging 1%
Geographically, the exposure leans mostly toward developed markets, with around 62% in North America and 29% in developed Europe, plus small allocations in developed Asia, Africa/Middle East, and emerging Europe. That pattern broadly reflects where major defence and aerospace contractors are based, and it keeps currency and political risk centered in well‑established markets. However, it offers very limited participation in faster‑growing emerging economies. For someone seeking global balance, this would typically act as a developed‑world satellite rather than a complete worldwide allocation. The current geographic mix is sensible for the theme but narrow for a full long‑term equity plan.
Market capitalization
- Large-cap 59%
- Mid-cap 22%
- Mega-cap 11%
- Small-cap 6%
- Micro-cap 1%
Most holdings are in larger companies: roughly 59% large‑cap, 11% mega‑cap, and another 22% mid‑cap, with only a sliver in small and micro‑caps. Larger firms tend to have more stable cash flows, deeper client relationships, and stronger balance sheets, which can provide some resilience compared with very small speculative names. At the same time, the modest small‑cap slice can add some growth potential and innovation exposure. Overall, this size mix lines up well with typical global equity benchmarks and supports the strong low‑volatility factor score, even though the thematic focus itself still brings meaningful concentration risk.
True holdings
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PA Palo Alto Networks Inc 5.75%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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BA BAE Systems plc 5.45%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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CS Cisco Systems Inc 5.02%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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LM Lockheed Martin Corporation 5.00%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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NO Northrop Grumman Corporation 4.84%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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SA Safran SA 4.75%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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RT Raytheon Technologies Corp 4.63%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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GD General Dynamics Corporation 4.52%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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PL Palantir Technologies Inc. 4.46%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
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CR Crowdstrike Holdings Inc 4.36%
Part of fund(s):- HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
- Top 10 total 48.77%
Looking through to the ETF’s top holdings shows big positions in well‑known defence and cybersecurity companies such as Palo Alto Networks, BAE Systems, Cisco, Lockheed Martin, and Northrop Grumman. Because you only hold this single ETF, there’s no cross‑fund overlap to worry about; hidden concentration here comes from the theme itself rather than from duplicating the same stock across multiple products. The top ten positions alone account for a meaningful slice of the fund’s risk and return. That kind of focus can be powerful when the theme is in favor, but it also means performance is tightly tied to how this specific cluster of companies behaves over time.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure shows a very strong tilt to momentum and low volatility, with a high tilt to value and lower tilts to quality and yield. Momentum means the portfolio leans into stocks that have been doing well recently, which can boost returns in trending markets but may hurt when trends suddenly reverse. Low volatility exposure suggests the holdings have historically had gentler price swings than the market, helping explain the relatively small drawdowns so far. The high value score may reflect companies priced reasonably relative to earnings or cash flows. Weak quality and yield exposure means less emphasis on strong balance sheets or steady dividends.
Risk contribution
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HANetf ICAV - Future of Defence UCITS ETF - Accumulating GBP
Weight: 100.00% 100.0%
Risk contribution shows that this single ETF accounts for 100% of the portfolio’s volatility, which perfectly matches its 100% weight. Risk contribution measures how much each holding adds to the portfolio’s overall ups and downs, similar to how one loud instrument can dominate an orchestra. In a one‑fund setup, there’s no uneven risk sharing between positions to worry about. Instead, the key question becomes whether this ETF’s overall risk is appropriate for the investor’s goals and comfort level. Adjusting that would require adding or sizing other holdings, since there’s no internal way to rebalance risk across multiple positions.
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