Geopolitical risks are rising, and investors are "returning to basics": Energy and defense ETFs are becoming popular choices for safe investments.

Head of VettaFi research Todd Rosenbluth said that the market volatility triggered by the political tensions involving GEO Group Inc has shifted investors' focus from alternative ETF products back to traditional industry allocation strategies that have stood the test of time. Despite the market turbulence not dampening overall demand for ETFs, it has reignited interest in basic industry allocations, particularly in the energy and defense sectors. Rosenbluth stated in an interview, "The market volatility linked to events such as the Iran conflict has directly increased investors' attention on energy ETFs." He pointed out that the energy index ETF SPDR (XLE.US) has been particularly popular, with the sector only accounting for 3% to 4% of the S&P 500 index, prompting investors to increase their positions. In addition to traditional energy assets, investors are also looking at the Alerian MLP ETF (AMLP.US) as an alternative choice. Rosenbluth explained that the energy infrastructure sector is a "more stable cash flow segment within the energy sector," and MLPs, which are master limited partnership companies, are not included in the S&P 500 constituents, making AMLP an attractive option for investors seeking diversified allocations. Due to the current global situation, the aerospace and defense sector has naturally become another major focus for investors. It is worth noting that investors are not only interested in conventional defense funds but are also seeking more specialized investments through products like the Global X Defense Tech ETF (SHLD.US). The relatively new index fund Rex Drone ETF (DRNZ.US) has also been attracting attention from investors, becoming an important target for investors looking to invest in cutting-edge technology in the aerospace and defense sectors. "These products have also shown very strong performance," Rosenbluth said, indicating that investors are exploring investment opportunities in specialized areas of the defense industry. This shift in funds also reflects the market's preference for allocating investments in basic industries during uncertain times. Despite the risks associated with market volatility, capital is flowing back into sectors like oil, natural gas, and defense - all of which are directly linked to the current political situation involving GEO Group Inc.