The Financial Times reports that a broker for Defense Secretary Pete Hegseth inquired about investing millions in BlackRock’s iShares Defense Industrials Active ETF (IDEF) shortly before the Feb. 28 strike on Iran. The ETF, launched in May 2025, focuses on defense, aerospace and security companies and was described as a possible beneficiary of increased government defense spending. Sources said the inquiry was "flagged internally" at BlackRock and did not proceed because the fund was too new to be offered to Morgan Stanley clients; the involved parties have not commented. The disclosure comes amid wider scrutiny of profitable market moves tied to major policy decisions.
Broker for Defense Secretary Reportedly Sought Millions in BlackRock Defense ETF Ahead of Iran Strike
In the weeks leading up to the Feb. 28 strike on Iran, the financial broker representing Secretary of Defense Pete Hegseth reportedly inquired about a multimillion-dollar investment in BlackRock’s newly launched iShares Defense Industrials Active ETF (IDEF), the Financial Times reported.
According to three people cited by the Financial Times, the broker’s inquiry was made "on behalf of a high-profile potential client" and was "flagged internally" at BlackRock. The proposed allocation was described as a multimillion-dollar interest in IDEF, an exchange-traded fund BlackRock launched in May 2025 that focuses on defense, aerospace and security-related companies.
About the Fund
BlackRock’s IDEF is described on the firm’s website as seeking to "pursue growth opportunities by investing in companies that may benefit from increased government spending on defense and security amid geopolitical fragmentation and economic competition." The fund’s holdings include companies that list the U.S. Department of Defense among their major customers.
Why the Trade Didn’t Proceed
The Financial Times reported the investment did not go forward because the ETF was very new and had not yet been made available to Morgan Stanley clients. BlackRock, Morgan Stanley and Secretary Hegseth have not commented publicly on the account.
Context and Disclosure
The report notes Hegseth’s recent earnings: roughly $4.6 million over two years while at Fox News and about $1 million from speaking engagements. The disclosure adds to scrutiny of highly profitable trades and market activity that have preceded major policy decisions by the Trump administration.
On March 23, former President Donald Trump told Hegseth: "And Pete, I think you were the first one to speak up. And you said, 'Let's do it, because you can't let them have a nuclear weapon.'" Trump added that discussions were underway and expressed cautious optimism about preventing Iran from acquiring a nuclear capability.
Observers and ethics experts say any inquiries linking senior officials or their representatives to investments in sectors that could benefit from government action raise questions about conflicts of interest and the need for transparency. At present, reporting on this specific inquiry is limited to the Financial Times account and the parties involved have declined to provide public comment.
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