Donald Trump says World War III is near: buy these ETFs if he’s right

on Oct 31, 2023
  • Donald Trump warned that the World War III could be near.
  • If he is correct, Military Industrial Complex companies will likely benefit.
  • Energy companies like ExxonMobil, Chevron, and Marathon will be beneficiaries.

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The world is getting relatively unstable. In Europe, the war between Ukraine and Russia is going on. And in the Middle East, a new war between Israel and Hamas is gaining steam. At the same time, tensions between the US and China are accelerating. 

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And new alliances are being formed. Russia is partnering with China, North Korea, and Iran. Most recently, BRICS expanded to include countries like Egypt, Argentina, and Saudi Arabia. Also, China is getting ready for the eventual invasion of Taiwan.

It is against this backdrop that Donald Trump warned that the World War III could be getting close. If he is right, this war would be the worst on record because of the advancement of technology and the fact that many countries are now nuclear states. Here are the two ETFs to buy if the World War III breaks out.

iShares US Aerospace & Defense ETF (ITA)

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Defence companies, which are also members of the Military Industrial Complex, are set to benefit whether the war happens or not. Most of these companies are already seeing record order inflows as governments prepare for the war. Many western governments are also boosting their defence spending as they replenish the stocks sent to Ukraine.

Therefore, investing in defence companies makes sense. The best way to do this is to invest in the iShares US Aerospace & Defense ETF (ITA), the biggest fund in the industry. Other similar funds you can consider are Invesco Aerospace & Defense ETF (PPA) and SPDR S&P Aerospace & Defence ETF (XAR).

These three funds invest in similar companies, with the biggest holdings being RTX, Boeing, Lockheed Martin, Northrop Grumman, General Dynamics, and L3Harris. 

The key risk for investing in these companies is that a World War III would lead to higher inflation and logistic challenges. As such, while orders would rise, margins would come under intense pressure.

Energy Select Sector SPDR Fund (XLE)

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The energy sector would be impacted if a major war happens in the coming years. As we saw after the Russia and Ukraine war broke out, crude oil price surged to over $130 per barrel. And in a statement on Tuesday, the World Bank warned that oil could surge to $150 if the Israel and Hamas war spreads. 

Therefore, energy stocks are a good place to hide if this happens. The Energy Select Sector SPDR Fund (XLE) fund is one of the best ETFs to buy. It has some of the biggest energy companies in the world like ExxonMobil, Chevron, EOG Resources, ConocoPhillips, and Schlumberger. The alternative ETFs are the iShares US Energy ETF (IYE) and the Vanguard Energy ETF (VDE).

China Donald Trump Oil Russia Ukraine USA Energy Energy & Power ETFs Inflation Political Stock Market