These three ASX exchange-traded funds (ETFs) have only been trading for just over a year, but wow, have they shot the lights out.
Defence spending has emerged as a long-term global investment theme given tensions involving Russia, China, and the Middle East.
Last year saw the largest annual increase in defence spending since the end of the Cold War, according to the Stockholm International Peace and Research Institute.
ASX ETF provider, Betashares, commented on the trend:
Global defence and security spending has significantly accelerated in response to evolving geopolitical risks, technological advancements, and the growing complexity of modern threats.
This is projected to continue for the foreseeable future as nations seek to strengthen their strategic defences.
Global X ETFs said defence "has been a sleepy corner of the market" for decades, with predictable budgets, legacy contractors, and little innovation.
"That era is rapidly coming to an end," the ETF issuer said.
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3 ASX ETFs that have skyrocketed since inception last year
These three ASX ETFs aim to capitalise on the global trend of massively higher defence spending by investing in different portfolios of listed military, defence, and technology companies.
Let's check them out.
Vaneck Global Defence ETF (ASX: DFND)
The DFND ETF is $39.91 per unit, down 1.8% on Friday.
Since inception on 10 September last year, this ASX ETF has delivered an average annual total return of 91.7%.
DFND ETF holds 32 shares and tracks the MarketVector Global Defence Industry (AUD) Index. It has $281.3 million in net assets.
The top five holdings are Thales SA, Palantir Technologies Inc, Leonardo SpA, RTX Corp, and Hanwha Aerospace Co Ltd.
Top sector allocations are aerospace and defence (71%), professional services (15%), software (8%), and machinery (5%).
The geographic allocation is 49% US, 12% South Korea, 10% France, 8% Italy, 6% Sweden, and 5% Germany.
The ASX ETF pays dividends (called 'distributions' with ETFs) once per year.
DFND ETF paid its first dividend of 3 cents per unit in July.
The management fee is 0.65% per annum.
Global X Defence Tech ETF (ASX: DTEC)
The DTEC ETF is $19.11 per unit, down 1.3% today.
Since inception on 7 October last year, this ASX ETF has delivered an average annual total return of 90.8%.
The DTEC ETF is focused on tech-driven defence, and uses a revenue filter to ensure exposure to AI, drones, and cybersecurity.
The ETF currently holds 37 shares and tracks the Global X Defense Tech Index. It has $111 million in net assets.
Currently, the top five holdings are Palantir, Rheinmetall AG, RTX Corp, BAE Systems PLC, and Lockheed Martin Corp.
The top industry allocations are aerospace and defence (79%), software (9%), professional services (7%), and electronic equipment (1%).
Geographic exposure includes the US (57%), Britain (10%), Germany (7%), South Korea (7%), Italy (4%), and Sweden (4%).
The DTEC ETF did not pay a distribution in its first year of trading.
The yearly management fee is 0.5%.
In recent commentary, Global X said global defence was "entering a super-cycle" with a structural pivot toward tech-first capabilities.
The provider said:
Nations worldwide are rapidly moving beyond traditional weapons systems, investing heavily in autonomous platforms, AI-powered command and control systems, and sophisticated cyber defence architectures engineered for speed, precision, and adaptability.
But the more significant shift lies not in the scale of spending, but in its direction. Procurement is shifting decisively toward tech-enabled solutions and battlefield AI, marking a generational overhaul of global defence infrastructure.
Betashares Global Defence ETF (ASX: ARMR)
The ARMR ETF is $26.49 per unit, down 0.9% today.
Since inception on 2 October last year, this ASX ETF has delivered an average annual total return of 76.8%.
The ARMR ETF invests in companies that make more than 50% of their revenue from the development and manufacturing of military and defence equipment, as well as defence technology.
A key point of difference with ARMR is that it only invests in global companies headquartered in NATO member and major ally countries.
That's handy, given that the 32 NATO nations have just committed to raising their defence spending from 2% to 5% of GDP over the next decade.
The ETF currently holds 52 shares and tracks the VettaFi Global Defence Leaders Index (before fees). It has $216.7 million in net assets.
Currently, the top five holdings are Palantir, Lockheed Martin Corp, Rheinmetall AG, Safran SA, and RTX Corp.
Top industry allocations are aerospace and defence (84%), application software (9%), research and consulting services (6%), and construction and transport machinery (2%).
Geographic exposure entails the US (61%), France (11%), Germany (9.5%), Britain (8%), and South Korea (4%).
The ARMR ETF pays one dividend per year.
ARMR ETF paid its maiden dividend of 53.546615 cents per unit in July.
There is an annual management fee of 0.55%.
