Key Highlights
One standout performer in the stock market over the last couple of years is Rocket Lab (NASDAQ: RKLB). This company focuses on launch services, rockets, spacecraft, and satellite equipment, establishing itself as a significant player in both U.S. and global space initiatives. In 2024, Rocket Lab’s stock surged by 360%, and it climbed another 174% in 2025. To put this into perspective, a $10,000 investment made three years ago would now be valued at about $186,880—a transformative increase for many investors.
Rocket Lab is certainly an attractive investment option for those interested in space stocks. However, I’m inclined to suggest another option, the Defiance Drones and Modern Warfare ETF (NYSEMKT:JEDI). This fund not only includes Rocket Lab as its primary holding but also provides a stake in a variety of other compelling companies across related sectors.
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Understanding the JEDI ETF
The Defiance Drone and Modern Warfare ETF is managed by Defiance ETFs, which specialize in thematic investing. ETFs come in a variety of shapes and sizes, including index funds like the S&P 500, as well as thematic ETFs that focus on specific industries. The JEDI ETF is classified as the latter.
This ETF consists of companies engaged in military drone development, AI technologies for defense, space-related products (even involving space-based weaponry), military robotics, and cybersecurity for military applications. Each stock must derive at least 50% of its revenue from these segments.
Additionally, no single stock is allowed to constitute more than 10% of the total index, which mitigates the risk of overexposure. Currently, the JEDI ETF holds 26 stocks, with Rocket Lab being the most significant. The top 10 stocks in the fund represent 64% of its total weight.
|
Ranking/Company name |
ETF weight |
1 Year Performance |
|---|---|---|
|
1. Rocket Lab |
8.66% |
180.8% |
|
2. Kratos Defense and Security Solutions |
7.29% |
242.4% |
|
3. L3 Harris Technologies |
6.83% |
56.1% |
|
4. RTX |
6.73% |
57.1% |
|
5. serve 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. aviation environment |
5.53% |
80.1% |
|
10. Leidos |
5.39% |
20.1% |
Data Source: Defiance ETF
While Rocket Lab is certainly a strong contender, it’s worth noting that it isn’t the top performer within the JEDI ETF over the past year. That title goes to Kratos Defense, which has made significant strides in developing fighter planes and various military technologies, including cybersecurity solutions. Kratos is outpacing Rocket Lab with its production of high-performance drones and satellite communications focused on space applications.
Another noteworthy entity in this fund is Palantir, known for its data analytics and utilization of satellite data to create valuable software for military and intelligence operations. Its platforms—Artificial Intelligence Platform (AIP) and Foundry—are gaining traction with commercial clients.
Rocket Lab’s Role in the JEDI ETF
Some companies within the JEDI ETF have a more pronounced military emphasis. For instance, Rocket Lab is on track to complete 21 successful launches in 2025, partnering with clients like the U.S. Space Force and Black Sky Technology, as well as Japan’s National Space Agency, among others.
Additionally, Rocket Lab participated in NASA’s Escapade mission to Mars, which launched on November 13, sending a spacecraft via a Blue Origin rocket to investigate the Martian atmosphere’s reaction to solar wind.
The company also has substantial military contracts, including an $816 million deal with the U.S. Space Development Agency for missile-tracking satellites and a $515 million contract to create a satellite communications network for military data transmission. There’s also speculation around Rocket Lab bidding for the Pentagon’s Golden Dome program, which addresses missile interception using both land and space-based systems.
Recently, President Trump emphasized a desire to increase the U.S. defense budget from $900 billion in 2026 to $1.5 trillion by 2027, which could be beneficial for Rocket Lab and other stocks in the JEDI ETF.
While I appreciate the allure of high-flying stocks with impressive growth stories, I believe investing in ETFs is a more strategic move. The Defiance Drone and Modern Warfare ETF, launched in September 2025, serves as an excellent option for those inclined toward Rocket Lab. Despite its slightly higher expense ratio of 0.69% (or $69 per $10,000 invested annually), it remains reasonably priced and delivers returns that align with its costs.
Should You Consider Investing in the ETF Series Solutions – Defiance Drones and Modern Warfare ETF?
Before making any decisions regarding shares of the ETF Series Solutions – Defiance Drones and Modern Warfare ETF, keep in mind the following:
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