Defiance ETFs is betting on drones and AI-driven autonomy as the backbone of next-generation defense and infrastructure.
CIO Sylvia Jablonski says the new Defiance Drone & Modern Warfare ETF (NYSE:JEDI), which launched today, is designed to capture this transformation, targeting companies that are reshaping both military and commercial applications of drone technology.
JEDI is biding its time at current levels. Watch the momentum here.
Unlike traditional defense funds, JEDI deliberately excludes legacy primes, focusing instead on innovators pushing the boundaries of modern warfare and autonomy. The ETF tracks the BITA Drone & Modern Warfare Select Index, which includes companies deriving at least half their revenue from areas such as military drones, unmanned systems, ISR, space-based warfare, cybersecurity and AI-driven IT.
"Drones are at the center of next-gen technology: they combine AI, robotics, data, and aerospace," Jablonski told Benzinga. "JEDI is the first ETF to capture this shift, giving investors access to the companies shaping the future of autonomy — not just defense, but supply chain, agriculture, energy, and infrastructure."
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She highlighted geopolitics and innovation as twin engines driving demand. The U.S. is prioritizing domestic drone manufacturing for national security, while commercial adoption is accelerating in fields like precision farming, Amazon-style delivery and real-time infrastructure monitoring.
That dual opportunity is reflected in JEDI's portfolio construction. On the defense side, companies are developing smarter, smaller, and faster unmanned systems. On the commercial side, drones are evolving beyond hardware into what Jablonski calls an "ecosystem play," with AI software, navigation, and computer vision opening new frontiers. "Drones are becoming flying data centers," she said. "AI enables autonomous decision-making, swarming, predictive logistics. Companies that own that AI + sensor advantage are where we see the moat."
While heavily weighted toward U.S. firms, given policy and spending priorities, JEDI also taps into international innovators from Israel, Europe, and Asia. The ETF blends growth-oriented startups with scalable manufacturers already securing contracts, offering both innovation exposure and revenue visibility.
Regulation, including export controls and FAA rules, remains a factor, but Jablonski sees these as barriers to entry that can benefit established players. With diversification across hardware, software, and applications, the fund is designed to smooth volatility. Though primarily a growth ETF, it also includes select cash-flow positive companies to add stability.
That balance makes drones a rare crossover sector, Jablonski argues. In risk-off markets, defense exposure offers ballast, while in risk-on environments, commercial AI adoption drives upside. Over the next three to five years, she expects drones to become "ubiquitous infrastructure: as common as satellites in defense and as standard as delivery vans in commerce," with the industry on track for double-digit growth.
To keep pace with rapid innovation, JEDI will rebalance quarterly, ensuring exposure to emerging players in drones, AI and autonomy.
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