HANetf : Ukraine Reconstruction UCITS ETF Debuts on LSE, Providing Targeted Exposure to Post-War Rebuild

The fund tracks the VettaFi Ukraine Reconstruction Index and carries a total expense ratio (TER) of 0.65 per cent. It provides exposure to European infrastructure and defence firms, select global industrial companies, and includes a mechanism for adding Ukrainian-listed companies as local capital markets develop .

Reconstruction Cost Now Estimated at $588 Billion

The launch follows an updated assessment of Ukraine’s reconstruction needs. A joint report published in February 2026 by the World Bank, the European Commission, the United Nations, and the Government of Ukraine estimated the cost of recovery and reconstruction at $588 billion over the next decade . This figure is nearly three times Ukraine’s projected 2025 GDP.

The updated estimate, covering damage through to the end of December 2025, represents an increase from the previous $524 billion forecast. The highest needs are in the transport sector, exceeding $96 billion, followed by the energy and housing sectors at approximately $91 billion and $90 billion respectively . The report noted that 14 per cent of the country’s housing stock has been damaged or destroyed .

Methodology and Ukrainian Company Access

UKRN is designed to capture companies involved in infrastructure construction, energy systems, industrial equipment, transport networks, and defence-related capabilities. The index excludes companies with identified operational exposure to Russia .

A distinct feature of the methodology is the provision for including Ukrainian companies. Standard eligibility thresholds are reduced to accommodate currently lower liquidity in Ukrainian equities. The minimum market capitalisation is set at $50 million, compared to the standard $100 million. Free float requirement is $25 million, and average daily trading volume minimum is $500,000. The index also allows for fast-track inclusion of qualifying Ukrainian IPOs within 10 to 50 days of listing . Up to 5 per cent of assets may be allocated to Ukraine-focused closed-end funds.

Defence Industry Transformation

The ETF’s focus includes defence-related capabilities, a sector where Ukraine has significantly expanded its domestic capacity. Official figures indicate that by the end of 2025, the Armed Forces of Ukraine were receiving drones at an increased rate. Prime Minister Denys Shmyhal stated in December 2025 that the military would receive 3 million FPV drones by year end, nearly 2.5 times more than the previous year .

The domestic drone manufacturing sector has grown from approximately 10 companies in 2022 to an estimated 500 companies in 2025 . Annual production capacity is reported to have reached around 4 million units . International defence firms, including BAE Systems, Rheinmetall, and Saab, are establishing local production in Ukraine.

In February 2026, four Ukrainian defence manufacturers signed partnership agreements with companies from Denmark, Finland, and Latvia under the “Build with Ukraine” framework. The agreements, valued at approximately €800 million, cover cooperation in unmanned systems and ground robotics .

Hector McNeil, Co-Founder and Co-CEO of HANetf, commented on the fund’s potential function.

“Ukraine’s reconstruction is about alignment with Europe, modernisation of industry and the development of transparent, functioning capital markets,” McNeil said. “We believe UKRN can serve two important roles. First, as an investment vehicle providing exposure to companies that may benefit from Ukraine’s reconstruction and economic integration. Second, as an immediately ready, public market buyer for any Ukrainian companies should they access international exchanges.”

McNeil added that the development of Ukraine’s capital markets will be central to its long-term economic resilience. “We hope this ETF can play a constructive role in that evolution by facilitating Ukrainian capital formation” .

Forward Outlook

The fund is positioned to provide exposure as Ukraine’s industrial base aligns with European supply chains and standards. The methodology allows the portfolio to adapt over time, shifting from international firms executing reconstruction projects toward direct investment in Ukrainian companies as listings and liquidity increase. The reconstruction effort, spanning transport, energy, and industrial modernisation, represents a multi-year capital program supported by international public and private funding commitments .