DUTY  |  U.S. Defense ETF

Why Now

• United States is the world’s largest defense spender, at roughly $997 billion, representing 1/3 of global military expenditure¹
• Cybersecurity threats accelerating with damages projected to exceed $10 trillion annually by 2025²
• The U.S. CHIPS and Science Act provides more than $50 billion to strengthen semiconductor supply chains³

These structural trends are reshaping national-security priorities and driving long-term investment in defense, cybersecurity, and strategic technologies

What makes DUTY different

1. Focus on modern defense technologies
2. Strategic Cybersecurity exposure
3. Emphasis on defense-driven revenues
4. Commitment to veteran support

Modern Defense Infrastructure

Global security priorities are shifting toward advanced defense systems.

DUTY provides exposure to companies supporting next-generation military systems, drones, space defense, and mission-critical technologies

Defense spending is driven by long-term government priorities rather than economic cycles.

Strategic Cybersecurity Exposure

National security is increasingly digital.

Cyber threats to governments, infrastructure, and financial systems continue to rise. Cybersecurity spending has become structural.

DUTY provides exposure to companies protecting governments and infrastructure through network security, cyber intelligence, and defense-grade software

Cybersecurity is a core pillar of modern defense.

Focused Exposure to Defense Revenues

The Index methodology emphasizes companies with meaningful defense-related revenues while limiting exposure to firms primarily driven by commercial aviation

This approach aims to provide focused exposure to national-security spending trends.

Key ETF Details

DUTY (U.S. Defense ETF) is a passive ETF that seeks to track the Solactive U.S. Defense Index.

The ETF intends to invest in U.S. companies positioned to benefit from increased spending on traditional and modern defense technologies. The Index is constructed across four defense-related sub-themes: 1) Defense Systems & Military Platforms, 2) Defense Technology, 3) Defense Logistics, Simulation & Mission Support and 4) Cybersecurity & Digital Defense Infrastructure

Index Methodology Summary

Selection

Companies are only eligible if they generate at least 50% of their revenues from one of the following business fields:

• Defense Systems & Military Platforms: This segment covers companies that manufacture core physical defense systems, including firearms, munitions, and advanced weaponry, as well as military aircraft, helicopters, armored vehicles, naval vessels, and unmanned platforms. It also includes missile developers, missile-defense systems, and space-related defense technologies such as military satellites, launch systems, and strategic deterrence platforms.
• Defense Technology: This segment includes companies developing advanced sensors, radar and optical systems, electronic warfare equipment, and the digital infrastructure that enables modern defense operations. It also covers C4ISR technologies such as mission communications, battlefield management, geospatial intelligence, and data-fusion platforms as well as autonomous and AI-enabled defense systems across air, land, sea, and space.
• Defense Logistics, Simulation & Mission Support: This segment focuses on companies providing engineering services, training and simulation tools, and maintenance and lifecycle support for defense equipment. It also includes providers of logistics solutions, military supply-chain management, and operational readiness services that ensure defense systems remain deployable and mission-ready.
• Cybersecurity & Digital Defense Infrastructure: This segment includes companies delivering cybersecurity solutions tailored to defense and national security needs, such as network defense, encryption, identity management, threat intelligence, and incident response. It also covers AI-driven cyber defense, secure tactical communications, cloud security, and cyber-physical protection for critical defense systems and infrastructure.

Universe

Companies qualify for the selection pool if they meet the following criteria:

• Listed on NASDAQ or NYSE stock exchange
• Security market capitalization of at least $100M
• Average daily volume (ADV) of at least $1M

Weighting Scheme

Index components will be weighted according to their market capitalization with the following caps:

• Single Security Cap at 8%
• Security classified as “Cyber Security” are capped at 3% with a total combined “Cybersecurity” weight of 25%
• The aggregate weight of securities with weights over 5% cannot exceed 40% of the index weight

Rebalance & Reviews

The index will rebalance semi-annually on the third Friday in May & November (selection day 10 days prior to rebalance) and reweighting: Third Friday in February & August

Veteran Support: Purpose-Driven Investing

Aura ETFs Inc., through certain ETFs aims to support charities. Namely as sponsor to DUTY, Aura intends to donate 10% of the ETFs revenue to charitable organizations supporting military veterans (Aura ETFs Inc. has also committed to donate a minimum $150,000 during the Fund’s first year of operations).

Investing in national security should also support those who served.

Donations are made by Aura ETFs and are not Fund expenses. Donation amounts may vary based on assets and

Sources

1. https://www.sipri.org/sites/default/files/2025-04/2504_fs_milex_2024.pdf
2. https://cybersecurityventures.com/cybercrime-damage-costs-10-trillion-by-2025/
3. https://www.nist.gov/chips