As actively managed exchange-traded funds (ETFs) grow in popularity over traditional passive funds, investors may find that these ETFs can provide a benefit when it comes to more timely investment issues, such as those related to the ongoing war in Iran. The main advantage of most active funds is that managers can adjust the portfolio in real time and in response to market developments—most passively managed funds are linked to indices that may rebalance periodically.
Investors usually have to pay more in annual fees for active management, but actively managed funds may be worth the extra cost if they can successfully generate strong performance in a fast-moving investment environment. To be sure, the conflict in Iran is that kind of situation: with constant updates on the goals and strategies of the United States, not to mention the great chaos that is happening within the energy market, investors in defense stocks must be gentle and responsive to make the best decisions day by day. The active protection ETFs below may be a good place to start for those looking to take these steps out.
A Comprehensive Fund for International Protection and Security, but with a Low Performance Track Record
iShares Defense Industrials Active ETF NASDAQ: IDEF has a broad focus on companies that can benefit from increased defense and security spending around the world. As such, it can hold a portfolio of aerospace, defense, infrastructure, and cyber security firms around the world, although about 60 percent of the basket is made up of US-based stocks. Other leading countries are represented by South Korea, the United Kingdom, and Japan, among others.
Shares Defense Industrials Active ETF today
iShares Defense Industrials Active ETF
From 11:04 AM in Mpumalanga
- 52 week interval
- $24.97
▼
$36.88
- Dividend Yield
- 0.15%
- Assets Under Administration
- $3.29 billion
IDEF stocks tend to get a boost from rising government defense spending due to the country's turmoil—making it particularly responsive to unique conflicts like the wars in Iran and Ukraine, for example.
The fund owns about 111 stocks, with the 10 largest taking up more than 42% of its portfolio – these include major US defense and security names like RTX Corp. NYSE: RTX and Lockheed Martin Corp. NYSE: LMTalthough international companies such as Rheinmetall OTCMKTS: RNMBY and Mitsubishi Heavy Industries Ltd. OTCMKTS: MHVYF and often appear in high stocks.
Despite its heavy focus on a small number of large names, IDEF is among the most diverse defensive ETFs available. It's also incredibly inexpensive for an actively managed fund, with an average expense ratio of 0.55%. What IDEF does not have, however, is a long track record of success. This fund was only launched in May 2025, so it doesn't even have a full year of performance history as of this writing. Still, since its launch, it has returned more than 25%, and that's despite a 15% selloff last month amid a broader market decline.
Space-Oriented Bag with Protective Angle
ARK Space Exploration & Innovation ETF Bats: ARKX it is unique in that it achieves specific protection terms within the broad boundaries of a central theme. There is, indeed, significant overlap between space technology firms and the defense industry—companies focused on smart machines, autonomous mobility, reusable rockets, and similar innovations may find business in both spaces.
ARK Space Exploration & Innovation ETF Today
ARK Space Exploration & Innovation ETF
From 11:06 AM in Mpumalanga
- 52 week interval
- $15.07
▼
$35.53
- Assets Under Administration
- $717.33 million
The overall portfolio of companies in ARKX is small, and the fund has fewer than a dozen unique positions, meaning it is well-focused. It also has a higher expense ratio compared to IDEF, as it charges an annual fee of 0.75%.
Investors should note that ARKX is not a defensive play compared to IDEF, which includes many mainstream companies such as Amazon.com Inc. NASDAQ: AMZN and Alphabet Inc. NASDAQ: GOOGalthough it is at a lower level than many of the key defensive players in its portfolio.
This fund has a longer history than IDEF, with five years from its launch date and a one-year return of nearly 60%. Like IDEF above, this is after a decline—in ARKX's case, about 13%—in recent weeks.
With a narrower focus on the stock space, it may be less likely that ARKX will make immediate changes to its portfolio of companies than fund managers adjust portfolio allocations in response to news updates. However, even adjusting the instruments can make a big difference in the returns that ARKX is able to secure in a rapidly changing market.
Before you consider the iShares Defense Industrials Active ETF, you'll want to hear this.
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