DRNZ Outperforms SHLD on Small- and Mid-Cap Tech Bets

REX’s Drone ETF (DRNZ) has returned about 11% year-to-date in 2026, while Global X’s Defense Tech ETF (SHLD) is down roughly 1.7% for the same period. The two funds follow different index rules and hold different mixes of companies.

DRNZ tracks the VettaFi Drone Index and targets firms that derive at least half their revenue from drones, unmanned aircraft systems and autonomous flight. SHLD follows the Global X Defense Tech Index, which includes a broader set of defense-technology companies such as legacy aerospace suppliers, cybersecurity and big-data firms.

Sector allocations reflect those index choices. SHLD’s portfolio is about 91% industrials and roughly 9% technology. DRNZ’s weights are near 57% industrials and 26% technology, with the remainder in consumer discretionary (about 13.3%) and media and communications (about 3.1%).

Market-cap exposure differs sharply. SHLD holds roughly 87% large-cap stocks and about 13% combined mid- and small-cap names. DRNZ’s holdings are roughly 19% large-cap, 44% mid-cap and 35% small-cap.

Geographic exposure also varies. SHLD concentrates about 86% of its holdings in North America and Europe. DRNZ has a larger share of companies domiciled in Asia, the Middle East, the Pacific/Australia region and Latin America.

Overlap between the funds is limited, at about 13%. DRNZ’s top three holdings are NextVision Stabilized Systems (approximately 13.3% of assets), Ondas Inc. (about 11.5%) and AeroVironment (about 10.9%). NextVision has risen about 46% year-to-date. SHLD’s largest positions are Lockheed Martin (about 8.6%), RTX Corporation (about 8.07%) and General Dynamics (about 8.01%).

The effective holdings ratio is about 0.43 for SHLD and about 0.36 for DRNZ. A higher ratio indicates a more even distribution of weight across effective holdings, while a lower ratio indicates greater concentration in fewer names.

Fund details: DRNZ launched Oct. 29, 2025, with a 0.65% expense ratio. SHLD launched Sept. 11, 2023, with a 0.50% expense ratio. VettaFi LLC serves as index administrator and calculation agent for the VettaFi Drone Index and is paid a fee for that role; VettaFi is not the issuer or sponsor of DRNZ.