Evolve defense ETF tilts 75% to non-US names

Evolve ETFs has started trading a defense and aerospace fund on the Toronto Stock Exchange with an unusual construction: three-quarters of CAMO's weight sits with non-US companies. The fund, which began trading August 20, tracks the Solactive Global Leaders Defense & Aerospace Index, ETF Express reports. The listing drops CAMO into a corner of the thematic market that has grown more crowded as governments rearm, but the index methodology is what separates it.

Solactive's rules start from its global all-cap universe, pull companies out of FactSet's Aerospace & Defense classification, and apply minimum liquidity and free-float filters before selecting the 10 largest eligible US securities and the 20 largest eligible non-US securities by free-float market capitalization. Individual positions are capped between 1 per cent and 7.5 per cent, stocks listed in India, Israel, China, and Turkey are excluded, and the basket is rebalanced quarterly, with CAD-hedged units trading under CAMO and CAD-unhedged units under CAMO.B.

The non-US tilt is the pitch, and both firms are explicit about why: Solactive chief markets officer Timo Pfeiffer says defense and aerospace have become increasingly global as governments reassess security priorities, while Evolve CEO Raj Lala cites record global military spending of $2.89 trillion in 2025, roughly two-thirds of it outside the US. The index is built to capture that split, and the 25/75 allocation is deliberate; the selection of 10 US names versus 20 non-US names is the mechanism.

That mechanism makes CAMO a side bet on allied procurement budgets, a rules-based expression of the idea that European and Asian governments will carry more of the burden. The exclusions of India, Israel, China, and Turkey make it a cleaner expression than a plain all-world defense index would be. The 10 US names sit alongside 20 non-US names, shifting the portfolio's center of gravity clearly outside the United States; for Canadian investors, the pitch is a single ticker that leans against the US defense establishment while still holding 10 of its largest names.

The launch also lands in a busy year: Goldman Sachs expects $2 trillion in 2026 US ETF inflows, as this publication has reported, and the launch machine keeps producing novel slices of established themes, with Pacer's first Cash Cows bond ETF and a UCITS built on quantamental ratings arriving in the same month. CAMO's slice is a 30-stock portfolio that underweights the US defense establishment, and the dual Canada-listed share classes suggest Evolve expects a long holding period rather than trading flow, while also serving hedged and unhedged demand in one listing.

For advisors, CAMO is a deliberate geopolitical call in a wrapper; for the platform, it is one more line on a crowded shelf. The fund's fate will be decided by whether investors who already own the US primes see it as a diversifier or a replacement. The dual share classes are Evolve's wager that the question stays open long enough for the quarterly rebalances to matter.