State Street SPDR S&P Kensho Future Security ETF (FITE) seeks to track the S&P Kensho Future Security Index, which measures companies developing technologies for national security, cybersecurity, and defense applications. This innovation-focused equity ETF targets firms creating advanced security solutions including artificial intelligence, robotics, and surveillance technologies.
How It Works
FITE uses a passively managed, modified market-capitalization-weighted approach that mirrors its benchmark index. The fund holds stocks of companies identified through Kensho's artificial intelligence platform as having significant revenue exposure to future security technologies. Holdings are weighted by market cap with adjustments to ensure diversification across security subsectors. Rebalancing occurs semi-annually to maintain alignment with evolving security technology landscapes and index methodology changes.
Key Features
- AI-powered stock selection using Kensho's machine learning platform to identify pure-play security technology companies
- Focuses on emerging defense technologies like autonomous systems, quantum computing, and advanced cybersecurity solutions
- Captures growth in government and private sector spending on next-generation security infrastructure and technologies
Risks
- This ETF can lose significant value if defense spending cuts or geopolitical tensions ease, reducing demand for security technologies by 20-40%
- Technology concentration risk means sector-wide selloffs in growth stocks could cause 30-50% declines during market corrections
- Small portfolio size and specialized focus create higher volatility than broad market ETFs, with potential for extended underperformance periods
Who Should Own This
Best suited as a satellite holding (5-15% of equity allocation) for aggressive growth investors with 3+ year time horizons seeking exposure to defense technology trends. High risk tolerance required due to sector concentration and growth stock volatility. Appeals to thematic investors betting on increased global security spending and technological warfare evolution.