Top UCITS Alternatives to ITA

The iShares U.S. Aerospace & Defense ETF (ITA) is the largest and most liquid fund in its category. It tracks the Dow Jones U.S. Select Aerospace & Defense Index, providing concentrated, market-cap-weighted exposure to domestic contractors like RTX Corporation, Lockheed Martin, and Boeing.

Anchored by long-term, non-discretionary government budgets, institutions and investors usually choose this fund as a tactical hedge against geopolitical instability and a direct play on rising global defense spending.

However, for long-term Indian investors, ITA carries a critical structural risk: the US estate tax. If you hold US-domiciled assets like ITA and your holdings exceed $60,000, your estate faces US estate tax at progressive rates of up to 40% on your death. On a $500,000 holding, that works out to roughly 29% of the portfolio.

This blog gives you all the information you need about the top UCITS alternatives. There is no US-only aerospace and defense UCITS ETF that replicates ITA, so the alternatives listed below track broader global or thematic defense indices. They still hold US defense names while adding NATO-allied companies and defense technology, without the risk of the US estate tax.

Table of contents

1. Why Indians are looking for UCITS alternatives to ITA
2. Popular UCITS alternatives for ITA
3. Invest in UCITS ETFs with Paasa

Why Indians are looking for UCITS alternatives to ITA

Indian investors are shifting to UCITS alternatives because they solve the tax risks and inefficiencies of US ETFs like ITA while providing similar thematic exposure.

• Estate Tax Protection: UCITS funds are typically domiciled in Ireland. They are not considered "US-situs" assets, meaning they are 100% exempt from US Estate Tax.
• Tax Deferral (Accumulation): Unlike ITA, which forces taxable cash dividends on you, many UCITS funds offer "Accumulating" classes that reinvest dividends automatically. This defers your Indian tax liability until you sell the fund, and converts what would have been slab-rate dividend income into capital gains.

To learn more about UCITS ETFs and why Indian investors are choosing them, read our guide on UCITS ETFs.

Popular UCITS alternatives for ITA

Here are the top three accumulating UCITS alternatives to ITA:

1. VanEck Defense UCITS ETF

Source

DFNS tracks the MarketVector Global Defense Industry Index. It holds US defense names such as Palantir, Leidos and Booz Allen, which lean towards defense software and IT services rather than ITA's aerospace primes, alongside European companies such as Safran and Thales. That spreads your exposure beyond US firms, in an accumulating structure.

With about £5.0 billion in assets (as of November 2026), it is the largest of the three funds here.

• Ticker: DFNS (LSE, USD)
• Total Expense Ratio (TER): 0.55%
• Structure: Accumulating (Reinvests dividends)
• Top Holdings: Palantir Technologies, Leidos Holdings, Safran SA, Thales SA, Booz Allen Hamilton.

2. HANetf Future of Defence UCITS ETF

Source

NATO invests only in companies earning revenue from NATO and allied defense spending. Unlike ITA, which is limited to US companies, it blends US defense giants such as RTX, Lockheed Martin and General Dynamics with European names such as BAE Systems and Rheinmetall.

It reinvests all dividends, so your Indian tax is deferred until you sell.

• Ticker: NATO (LSE, USD)
• Total Expense Ratio (TER): 0.49%
• Structure: Accumulating (Reinvests dividends)
• Top Holdings: General Dynamics, RTX Corporation, BAE Systems, Rheinmetall AG, Lockheed Martin.

3. Global X Defence Tech UCITS ETF

Source

ARMR captures traditional defense and aerospace companies but tilts heavily toward the future of warfare: cybersecurity, artificial intelligence, and advanced defense networks. If you like ITA's sector exposure but want defense-focused tech companies alongside traditional contractors, this accumulating ETF gives you a more tech-heavy growth profile than a traditional aerospace fund.

• Ticker: ARMR (LSE, USD) / 4MMR (Xetra, EUR)
• Total Expense Ratio (TER): 0.50%
• Structure: Accumulating (Reinvests dividends)
• Top Holdings: Palantir Technologies, Lockheed Martin, RTX Corporation, CrowdStrike, BAE Systems.

More UCITS alternatives: UCITS alternatives to BOTZ and UCITS alternatives to BUG.

Related: What are UCITS ETFs? and Should you switch from US ETFs to UCITS?

Invest in UCITS ETFs with Paasa

Paasa is a global investing platform designed for Indian residents and NRIs. We provide direct access to 11 markets: the US, Canada, the UK, Germany, France, Switzerland, the Netherlands, South Korea, Japan, Hong Kong and Singapore.

This means you are not restricted to just US ETFs like ITA; you can also buy tax-efficient UCITS equivalents using Paasa.

The compliance advantage

Paasa makes global investing easy and also removes the compliance friction with a specialized layer built for Indian residents and NRIs:

• Schedule FA reporting: Exact reports you need for your Indian tax returns, eliminating the need for manual calculations.
• FEMA & LRS guidance: Guidance on FEMA regulations and LRS limits to ensure compliance.

Whether you are buying direct US stocks or investing in UCITS ETFs listed on European exchanges, Paasa provides global access with India-specific compliance and tax support.