Bill Birmingham, REX Shares

Bill Birmingham spent his career as a buy-side equity research analyst before joining REX Shares, first to help build their crypto product suite, then to take on a broader mandate of finding emerging investment themes before they're obvious. That search led him to drones, and to DRNZ, the only pure-play drone and unmanned aerial vehicle ETF on the market.

About Bill Birmingham and REX Shares

REX Shares has built its issuer reputation by getting to the front of new themes before traditional issuers move. The firm runs a suite of 40 Act crypto products with tax-efficient 1099 treatment, including staking exposure that retail investors can't easily access elsewhere. Birmingham's role expanded out of that work into a broader emerging-themes mandate, which is where DRNZ originated. He spent months underwriting the drone supply chain, the regulatory landscape, and the actual commercial revenue picture before REX committed to building the index.

Why Existing Defense Funds Fail Drone Investors

The structural problem with using a traditional aerospace and defense ETF to express a drone thesis is dilution. The legacy primes that dominate those funds derive only a small fraction of revenue from drones, and the index weighting follows their full enterprise value. An investor looking for clean drone exposure ends up owning a basket where the drone signal is buried under decades of legacy hardware revenue. DRNZ was built specifically to fix that.

How DRNZ Is Constructed

The index uses a modified market-cap weighting that balances pure-play innovators against established names with meaningful drone revenue. Pure-play drone and UAV companies get the bulk of the weighting, while larger operators with real drone exposure are included at sized weights rather than allowed to dominate the basket. The construction is designed to capture the upside in emerging companies before they hit the institutional radar, while still anchoring the fund in established names.

The Generational Shift in Defense

Birmingham's military thesis is direct. Modern warfare has been redefined by low-cost drones in ways legacy defense planning is still catching up to. A loitering munition costing a few thousand dollars can disable a tank that costs millions. That cost asymmetry forces a generational rebuild of how militaries acquire, deploy, and defend against unmanned systems. The drone supply chain that emerges from that rebuild is the structural opportunity DRNZ is built to capture.

Counter-Drone May Be the Bigger Trade

Birmingham's strongest pitch was on counter-drone. Every offensive drone capability creates downstream demand for detection, jamming, and interception. The deployment math runs in one direction. Every airframe in the field requires counter-airframe infrastructure protecting against it, and Birmingham thinks that market may end up larger than drones themselves. DRNZ includes counter-drone exposure, and he treats it as one of the highest-conviction pieces of the index.

Commercial Demand Is Real Today

Outside the defense thesis, commercial drone revenue is already meaningful. Agricultural drones are a roughly $3 billion market today, used for spraying, mapping, and yield work. Last-mile delivery is past the pilot phase in several geographies. eVTOL (air taxis) has compressed its adoption timeline faster than Birmingham originally expected. The pieces still gated are gated by regulation, not technology.

The FAA BVLOS Unlock

The single biggest near-term catalyst Birmingham flagged is the FAA's pending Beyond Visual Line of Sight rulemaking. A long list of industrial drone use cases are technically ready today but cannot operate at scale because the regulatory framework still requires line-of-sight pilots. BVLOS finalizes the path for autonomous and remote-piloted operations across infrastructure inspection, agriculture, and logistics. When that rule lands, a backlog of commercial revenue gets unlocked at once.

Key Takeaways

• DRNZ is the only pure-play drone and UAV ETF on the market, built to capture clean drone exposure rather than the diluted slice inside a broader aerospace and defense fund.
• The modified market-cap weighting balances pure-play innovators against established names with real drone revenue.
• Modern warfare has been redefined by low-cost drones, and the cost asymmetry forces a generational rebuild of defense supply chains.
• Counter-drone may end up a larger market than drones themselves, with detection and neutralization demand growing alongside every airframe deployed.
• Commercial drone revenue is real today across agriculture, last-mile delivery, and eVTOL, and the FAA's pending BVLOS rulemaking is the regulatory unlock for the next wave.

Listen to the Full Episode

This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with Bill Birmingham on DRNZ, the drone supply chain, counter-drone, and the regulatory unlock for commercial use cases, listen on Spotify, Apple Podcasts, or watch on YouTube.