Defence and gold mining were the two biggest ETF investment themes in the second half of FY25, according to ETF provider Betashares.
Betashares said ASX exchange-traded funds (ETFs) ended FY25 at a record high $280 billion in total assets under management.
In its 2H FY25 report, Betashares said the net new investment cash flow into ETFs was $21.6 billion, nearly double that of 2H FY24.
Betashares Head of Product — Funds, Matthew Reeves, said ETF trading values rose 58% in the second half, "showing increased usage of the investment vehicle".
Investors ploughed $8 billion into international shares-based ETFs and $6.2 billion into ASX shares-based ETFs in 2H FY25.
This was a continuation of the trend in more Australian investors accessing overseas markets via ASX ETFs.
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2 dominant investment themes in 2H FY25
Reeves said defence and gold mining ETFs were the top performers over 2H FY25.
Defence and gold are both strong investment themes today.
Here's why.
Defence ASX ETF investment
At the ASX Investor Day in Sydney in May, several analysts highlighted the emerging global defence investment theme.
At the Hague Summit last month, the 32 NATO nations agreed to raise their military spending from 2% to 5% of GDP over 10 years.
NATO said it was "united in the face of profound security threats and challenges, in particular the long-term threat posed by Russia to Euro-Atlantic security and the persistent threat of terrorism …".
The Betashares Global Defence ETF (ASX: ARMR) only holds global companies headquartered in NATO member and allied countries.
The ARMR ETF invests in up to 60 companies that make more than 50% of their revenue from defence products and services.
Roughly 57.5% of the ETF's portfolio is in US shares, 11.3% in Germany, 10.8% in France, 9.1% in Britain, and 3.3% in South Korea.
ARMR only began trading in October last year. During the FY25 period, ARMR's unit value rose by 55%.
Another popular defence-themed ETF is the VanEck Global Defence ETF (ASX: DFND).
The VanEck Global Defence ETF is also pretty new, having commenced trading in September 2024.
This ETF holds 29 stocks. About 52.2% are US shares, 10.6% are in France, 8.4% in Italy, 8% in South Korea, and 6.4% in Sweden.
The DFND ETF rose by 75% in FY25.
Gold mining ETF investment
It's not surprising that ASX gold ETFs were a key investment theme given the relentless rise of the gold price in FY25.
The gold price hit a record US$3,500.05 per ounce on 22 April, and S&P/ASX All Ords Gold Index (ASX: XGD) shares soared 57% in FY25.
Investors saw gold and gold miners as appealing safe-haven investments amid geopolitical tensions and the US reciprocal tariffs.
The Betashares Global Gold Miners Currency Hedged ETF (ASX: MNRS) leapt 52% higher in FY25.
The MNRS ETF invests in 54 stocks, with 47.3% in Canada, 13.7% in the US, 11% in South Africa, and 7.8% in Brazil.
The VanEck Gold Miners AUD ETF (ASX: GDX) also did well in FY25, rising 56%.
The GDX ETF invests in 63 stocks, with 44% in Canada, 17% in the US, 10.5% in Australia, and 8% in Brazil.
Both GDX and MRNS featured in the top 6 ASX international shares ETFs for best returns in FY25.
Further reading
Check out the 6 best-performing ETFs holding ASX shares for total returns in FY25.
