The 2026 NATO summit in Ankara concluded this week against a backdrop of sweeping geopolitical shifts and immense pressure from Washington. With U.S. President Donald Trump making it clear that European allies can no longer unconditionally count on American protection, member states aggressively stepped up. 

In a decisive move to secure their own borders and satisfy burden-sharing demands, NATO allies have officially announced more than €50 billion, which translates to approximately $57 billion, in massive new defense procurement deals. This comes in addition to separate military aid packages, which include a €70 billion pledge for Ukraine. 

This unprecedented wave of fresh spending is set to ignite a long-term bull run for global defense contractors, creating a powerful tailwind for exchange-traded funds (ETFs) that hold them. 

To understand how to position your portfolio for this defense super-cycle, it is essential to analyze the key takeaways from the summit, its direct impact on defense primes, and why broad-basket ETFs offer a better investment strategy compared to individual stocks.

Key Takeaways From the Ankara Summit

This year’s NATO summit’s central theme was Europe’s accelerating journey toward strategic autonomy. The foremost takeaway from the summit was Europe’s forced awakening to defense self-reliance, driven by Trump’s transactional view of the alliance and warnings that the United States might scale back its commitments.

The numbers tell the story: total defense and security spending by European allies and Canada has already reached around 4% of GDP, just one year into a 10-year project. This marks smooth progress toward their promise to invest 5% of GDP in defense by 2035.  

As far as individual defense contractors are concerned, major deals were announced to boost production capacity on both sides of the Atlantic. Notably, American defense giant Lockheed Martin (LMT Quick QuoteLMT - Free Report) joined forces with its German defense prime Rheinmetall (RNMBY Quick QuoteRNMBY - Free Report) to establish the first European facility for the manufacturing, integration, and distribution of ATACMS tactical missiles at the latter’s artillery plant in Germany.

On the other hand, RTX Corp. (RTX Quick QuoteRTX - Free Report) announced plans to double its Stinger missile production through European partnerships. 

The summit also highlighted the delivery of the 10th Airbus A330 MRTT aircraft to the Multinational Multi-Role Tanker Transport Fleet; the procurement of Northrop Grumman (NOC Quick QuoteNOC - Free Report) Triton uncrewed aircraft to enhance NATO’s maritime surveillance; and the joint procurement of Saab GlobalEye aircraft to modernize NATO’s airborne early warning and control capabilities.

Further, at this summit, allies launched NATO’s Drone Edge, a major new initiative that will see $40 billion invested in counter-uncrewed systems over the next five years.

Impact on Defense Primes & the Case for ETFs

The tidal wave of capital from the deals, alongside the investment and military aid pledges announced at the Ankara summit, will flow directly into the order books of defense primes. This should translate into a multi-year revenue supercycle for prime defense contractors across both sides of the Atlantic, further strengthening the long-term growth outlook for the global defense industry. 

Against this backdrop, betting on individual defense primes carries unique risks, including supply-chain bottlenecks, strict regulatory compliance, and sudden project cancellations. Instead, gaining exposure through defense ETFs is a much smarter strategy, as these funds mitigate single-stock volatility while capturing the entire rising tide of global military modernization.

Defense ETFs to Buy Now

Considering the aforementioned discussion, investors looking to capitalize on the spending boom promised by NATO allies may consider adding the following defense ETFs to their portfolio now:

iShares U.S. Aerospace & Defense ETF (ITA Quick QuoteITA - Free Report)   

This fund, with net assets worth $14.27 billion, offers exposure to 49 U.S. companies that manufacture commercial and military aircraft and other defense equipment. RTX holds the second spot in this fund with 15.41% weightage, while LMT holds the seventh spot with 4.25% weightage. NOC holds the eighth spot with 4.25% weightage. 

ITA has surged 27.8% over the past year. The fund charges 38 basis points (bps) as fees. It traded at a volume of 0.42 million shares in the last trading session. 

Invesco Aerospace & Defense ETF (PPA Quick QuotePPA - Free Report)

This fund, with a market value of $8.24 billion, offers exposure to 62 companies involved in the development, manufacturing, operations and support of US defense, homeland security and aerospace operations. RTX holds the first spot in this fund with 7.47% weightage, while

LMT holds the fourth spot with 5.98% weightage. NOC holds the sixth spot with 4.75% weightage. 

PPA has soared 22.9% over the past year. The fund charges 58 bps as fees. It traded at a volume of 0.16 million shares in the last trading session. 

Themes Transatlantic Defense ETF (NATO Quick QuoteNATO - Free Report)

This fund, with a net asset value (NAV) of $40.74, offers exposure to 85 aerospace and defense companies headquartered in North Atlantic Treaty Organization member countries. RTX holds the second position in this fund, with 7.79% weightage, while LMT holds the fifth spot with 5.26% weightage.  Airbus holds the sixth position in this fund, with 5.14% weightage, while NOC holds the 10th spot with 3.50% weightage.

NATO has rallied 13% over the past year. The fund charges 35 bps as fees. It traded at a volume of 0.02 million shares in the last trading session.