Beyond Rockets: A Diversified Ascent

Now, listen closely. The market, as any seasoned observer of the whirling dervish that is capital accumulation will tell you, is a bit like a particularly temperamental dragon. It hoards, it breathes fire on the unwary, and occasionally, it deigns to bestow a glittering hoard upon those it deems… amusing. Recently, that dragon has been rather fond of Rocket Lab (RKLB +1.14%). A perfectly respectable company, mind you, launching things skyward and generally poking at the void. It’s done rather well for itself, leaping a considerable distance in the last couple of years. A modest ten thousand crowns invested a few seasons ago would now be enough to buy a small principality… or, failing that, a rather comfortable collection of gnomes.¹

But clinging to a single rocket, however shiny, is a bit like navigating the Discworld on the back of a particularly stubborn tortoise. It might get you there, but it’s hardly elegant, is it? I find myself increasingly drawn to the Defiance Drone and Modern Warfare ETF (JEDI +0.92%). Yes, the name sounds like something out of a pulp magazine, but bear with me. It includes Rocket Lab – so you don’t miss out on the upward trajectory – but also casts a wider net. A net woven from the threads of artificial intelligence, automated weaponry, and the general business of keeping things… interesting.²

What, Precisely, Is the JEDI ETF?

The JEDI ETF, operated by the estimable Defiance ETFs, is one of those ‘thematic’ funds. You see, some funds simply follow the herd, mirroring the movements of established indices like the S&P 500. Perfectly sensible, if you like sensible. Others, however, attempt to predict the future. Or, at least, capitalize on the current obsession with a particular concept. In this case, that concept is… well, let’s just say it involves a lot of things that go ‘boom’ or ‘whirr’ and are generally operated by people in uniforms. The companies within JEDI derive at least half their revenue from these… pursuits.

Crucially, no single company dominates the fund. A wise precaution, as placing all your eggs in one basket is generally frowned upon, especially if that basket is strapped to a rocket. As of this writing, JEDI holds 26 stocks, with Rocket Lab at the helm. The top ten account for a respectable 64% of the fund’s weight, a balance that suggests a degree of… considered chaos.

Rank/Company	ETF Weight	One-Year Performance
1. Rocket Lab	8.66%	180.8%
2. Kratos Defense & Security Solutions	7.29%	242.4%
3. L3harris Technologies	6.83%	56.1%
4. RTX	6.73%	57.1%
5. Saab AB	6.45%	282%
6. Thales SA	6.06%	94.7%
7. Palantir Technologies	5.79%	126.3%
8. Elbit Systems	5.78%	131.8%
9. AeroVironment	5.53%	80.1%
10. Leidos	5.39%	20.1%

Rocket Lab is in excellent company, though it’s not the star performer. That honor goes to Saab AB, a Swedish firm specializing in fighter jets and the art of digital fortification. Kratos Defense is also worth a look, building drones and satellite communications systems. It seems some companies are simply better at… optimizing for profit in this particular environment.

Palantir, of course, is the name everyone recognizes. They craft software that sifts through mountains of data – satellite imagery, intelligence reports, the collected anxieties of the internet – to provide clients with… insights. Their Artificial Intelligence Platform (AIP) and Foundry are gaining traction, promising to revolutionize everything from battlefield logistics to the tracking of particularly stubborn garden gnomes.

How Does Rocket Lab Fit Into This Grand Scheme?

Granted, some of the companies in JEDI are a little more… focused on the art of war. Rocket Lab, however, has launched 21 successful missions in the last year, serving clients like the U.S. Space Force, BlackSky Technology, and Japan’s space agency. Some of their clients prefer to remain… discreet.

They’re also involved in NASA’s Escapade mission to Mars, supplying the spacecraft launched by Blue Origin to study the Martian atmosphere. A noble pursuit, though one can’t help but wonder if the Martians are equally fascinated by our endeavors.

But they also have military contracts, including an $816 million deal to build missile-tracking satellites and a $515 million contract to establish a satellite communications network for the U.S. military. They’re even expected to bid on the Department of Defense’s Golden Dome project – a system designed to intercept incoming… unpleasantness.

President Trump has spoken of expanding the U.S. defense budget to $1.5 trillion. Such spending, naturally, benefits companies like Rocket Lab and the other constituents of JEDI. It’s a cycle, really. Fear breeds investment, investment breeds innovation, and innovation… well, it often breeds more fear.

I’m always drawn to companies with ambitious growth stories, but I believe diversification is key. The Defiance Drone and Modern Warfare ETF, launched in September, offers a convenient way to achieve that. The expense ratio is a rather hefty 0.69% – a small price to pay for the privilege of participating in the… unfolding drama. The returns, thus far, seem to justify the fee.

¹ Gnomes, you see, are surprisingly discerning investors. They have a keen eye for undervalued assets and a disconcerting habit of disappearing with your gold.

² The concept of ‘thematic’ investing is, frankly, a bit like alchemy. You’re attempting to turn base metals into gold by betting on a trend. It’s often successful, but it requires a certain amount of… faith.

2026-01-25 23:53

What, Precisely, Is the JEDI ETF?

How Does Rocket Lab Fit Into This Grand Scheme?

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