Investors excited about Drone ETFs as REX Shares and Defiance launch new offerings. Aerospace industry funds up 40% YTD, signaling strong performance. Analysts see potential in niche products but warn of high risk due to correlation between stocks in these ETFs.

Companies profiting from drones rely on government contracts. Defense spending hit $2.7 trillion last year, boosting profit margins. Big players like Boeing, Lockheed Martin, and RTX Corporation dominate the market. Evens emphasizes diversification in defense sector investments for stability and long-term growth.

iShares U.S. Aerospace & Defense ETF (ITA) up 46% YTD, Invesco’s Aerospace & Defense ETF (PPA) up 35%, Global X Defense Tech ETF (SHLD) up 79%. Diverse options for investors looking to capitalize on the aerospace and defense industry’s growth.

Analysts weigh the risks and rewards of investing in drone ETFs. Niche products can swing in performance but offer potential for high returns. Investors advised to allocate a small portion of their portfolio to mitigate risk. High correlation among stocks means ETFs can perform exceptionally well or poorly.

Read more at Yahoo Finance: Some Drone ETFs Are Soaring. Here’s What to Know