A report highlights how a defence-focused ETF inquiry linked to Pete Hegseth surfaced before escalation in West Asia, drawing attention to timing and geopolitical context.
US Secretary of War Pete Hegseth speaks during a press briefing at the White House. (@WhiteHouse)
A broker linked to US Secretary of War Pete Hegseth looked at putting money into a major defence-focused fund just weeks before the US and Israel launched military strikes on Iran, a Financial Times report cited by Reuters said.
The timing stands out. The region was already on edge, and the February 28 strikes quickly pushed West Asia into a wider crisis, shaking markets and raising fresh concerns over global energy supplies.
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According to Reuters, quoting the Financial Times, which mentioned three people familiar with the matter, the broker, who was working alongside Morgan Stanley, approached BlackRock in February to discuss a possible multimillion-dollar investment in the Defence Industrials Active ETF (IDEF). The approach was flagged internally at BlackRock, the report said.
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BlackRock’s USD 3.2 billion fund is designed to track companies expected to benefit from rising government spending on defence and security, particularly during periods of geopolitical strain. Its key holdings include Northrop Grumman, Lockheed Martin, RTX, and data analytics company Palantir, firms with strong links to the US Department of War.
The investment did not move forward because the ETF, which was launched in May 2025, was not yet accessible for purchase through Morgan Stanley at the time, Reuters reported, citing the Financial Times.
It is not known whether the broker later invested in a different defence-focused fund.
Funds like IDEF, which invest in defence companies, have become popular with investors because they are cheaper, more tax-efficient, and can be traded like stocks. But in reality, most broker platforms don’t offer the full range. Out of over 14,000 ETFs globally, only a small portion is actually available to investors, the report noted.
In the weeks since the strikes, Hegseth has repeatedly spoken about US military strength, projecting confidence after the operation against Iran.
On the ground, things are still very tense. On the ground, the mood is still tense. The February 28 strikes, which killed Iran’s Supreme Leader Ayatollah Ali Khamenei, sparked an immediate response from Tehran.
Soon after, Iran hit back with missiles and strikes targeting Israel and US-linked assets across Gulf countries.
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