A new report from Betashares has revealed the sectors and themes that are emerging in the current geopolitical climate.
According to Tom Wickenden, Investment Strategist at Betashares, geopolitics is now a structural driver of asset prices.
The short-term threat is the hit to global growth and the inflationary pressure from higher oil prices.
Given the recency of the shock, its impact will only show up in hard economic data with a lag. Put simply, the longer the war runs, the greater the risk of global recession. Our base case assumption remains a timely de-escalation without a severe shock to the global economy.
In yesterday's report, Betashares identified three ASX ETFs that could be ideal investments in today's climate.
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Betashares Global Defence ETF (ASX: ARMR)
According to Betashares, global defence stocks have been among the best performing since the start of Trump's second presidential term.
In April of 2026 the US proposed a US$1.5 trillion defence budget for FY27. This is the largest in history and a 50% increase on FY26.
Across the Atlantic, Europe's defence priorities are also accelerating.
EU defence spending is projected to rise from €218 billion in 2021 to €392 billion in 2025.
The direction of travel is clear, and defence contractors globally could be structural beneficiaries and a potential hedge to geopolitical threats that can cause broader equity market disruption.
The Global Defence ETF from Betashares provides a simple way to gain exposure to the potential long term structural growth in the global defence sector.
It currently holds 13 of the top 20 defence contractors in the world by defence revenue.
Betashares Global Uranium ETF (ASX: URNM)
The Betashares report said the Iran conflict has now re-ignited energy self-sufficiency concerns globally.
As governments reassess their baseload power (the minimum level of electricity a grid needs around the clock) and seek to reduce dependence on hostile suppliers, nuclear energy has re-emerged as a cornerstone of the solution.
With nuclear increasingly recognised as essential for energy independence, decarbonisation and AI-driven electricity demand, the uranium supply chain may be entering a period where demand outpaces supply, which could favour producers in allied nations.
An ideal allocation for investors looking to target this theme is the Global Uranium ETF.
It provides exposure to a portfolio of global companies involved in the mining, exploration, development and production of uranium. It also includes companies that hold physical uranium or uranium royalties.
Betashares Energy Transition Metals ETF (ASX: XMET)
Critical minerals, inputs essential for AI data centres, EVs, renewable energy and defence technology, are at the intersection of future technologies and geopolitics.
According to Betashares, renewed focus on diversifying away from Chinese dependence is leading to increased investment from Australia, the US and others.
Both the US and Australia have established strategic mineral reserves, and the latest US defence budget dramatically expands investment in domestic critical mineral supply chains. Selected producers from allied nations, Australia, Canada, Peru and Chile, could be well positioned to benefit from this government-backed push for supply chain resilience.
XMET ETF provides Australian investors with targeted exposure to global companies at the heart of the critical minerals supply chain.
