WisdomTree’s New Global and Asia Defense ETFs: Structure, Holdings, and Strategic Risks

The WisdomTree Global Defense Fund (WDGF) and WisdomTree Asia Defense Fund (WDAF) are two newly launched U.S.-listed ETFs (ticker WDGF, WDAF) that track proprietary WisdomTree indexes focused on defense-sector companies. Each fund has an expense ratio of 0.45%[1] and uses a physical, sampled replication strategy to passively track its benchmark index[2][3]. Both indices select companies with significant defense-related revenue and apply weighting schemes based on free-float market capitalization and exposure scores (1×, 2×, or 3×) for defense revenue[4][5]. Since their Sept. 12, 2025 launch, WDGF and WDAF have attracted modest assets (~$2–2.4 million each)[6][7]. Liquidity remains limited (low volumes) but bid-ask spreads have been moderate (about 0.26–0.38% recently[8][9]). Both ETFs focus on aerospace, defense electronics, and related technologies (e.g. AI, cyber, robotics) consistent with current rearmament trends[10]. WDAF concentrates in India and South Korea (~80% combined[11]), while WDGF is US-heavy (~53% US[12]) with smaller European, Asian, and allied exposures. By design, neither fund holds Chinese or Russian defense firms, instead emphasizing NATO/allied supply chains[4][5]. Key risks include geopolitical/regulatory exposure (export controls, sanctions, UK/EU/US defense policy), ESG and dual-use compliance (WisdomTree excludes banned weapons[13]), and concentration (WDAF’s Asia focus and WDGF’s US tilt). In sum, WDGF and WDAF offer targeted plays on global defense spending, complementing WisdomTree’s Europe Defense ETF (WDEF)[14][15], but carry typical defense-sector risks (sector concentration, political sensitivities).