New drone ETF launches with industry expected to reach $60B by 2030

The drone economy is taking off, and investors are getting more options to invest money in the emerging industry.

For example, the recently launched REX Drone exchange-traded fund allocates 80% of its portfolio to companies that generate the bulk of revenue from drones, unmanned aerial vehicles (UVA) and companies that support industry technologies.

“The topic of drones is exciting for several reasons,” Greg King, CEO of REX, told FOX Business. “No. 1, military applications. Ukraine and the Middle East have approved this service there. Defense budgets are shifting to spending a lot more on drones than on conventional weapons. But what’s even more exciting for us is the commercial applications. You have delivery services, surveillance services, inspection services across a variety of sectors that are now starting to ramp up along those lines.”

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Within the military, drones are becoming a game changer. Ondas Holdings, the fund’s largest position, provides next-generation aerial intelligence and communications technology to provide covert security.

An Ondas drone in flight. (Ondas)

AeroVironment, the second largest company owned, is best known for its Switchblade precision loitering munitions. The company recently expanded these combat-proven systems that help ensure warfighters “maintain tactical superiority in the most contentious environments,” the company said.

Ondas rail plane in action: video

Palantir Technologies, a smaller company, received high marks for its commitment to supporting only the US military. Its support for the US military includes software that helps decrypt data using artificial intelligence.

King said the drone industry is expected to grow about 8% to 10% annually, reaching $60 billion by 2030 as more industries adopt the technology.

Walmart is expanding its drone delivery service with DroneUp. (walmart)

WALMART is moving into drone deliveries

“The military has been growing steadily for a while, but with commercial applications, whether it’s crop monitoring or pipeline inspection or Amazon, Walmart and UPS delivering to remote areas, it’s really difficult to say which of those verticals within that theme are going to grow the most. That’s why we have such broad exposure to this theme,” he added.

DRNZ One-Stop Shopping is designed for those investors looking to capitalize on a growth industry. King likened the future of the industry to a connection with the past.

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“The efficiencies that can be achieved for us just support the whole investment thesis,” he said. “If you think about it, we invented small birds that we can control, right? We started with passenger pigeons, and now we have stronger, faster birds that we can send anywhere and do anything we want.”

“I think a lot of it hasn’t been thought about yet. So, it’s definitely an exciting space.”