Today, around two million Australians invest through ASX ETFs, drawn by their low costs, instant diversification, and simplicity. Rather than researching dozens of companies, investors can buy a single fund and gain exposure to hundreds – or even thousands – of investments.

The trend shows no sign of slowing. According to ASX data, ETF trading activity jumped 26% during the last financial year, comfortably outpacing the broader sharemarket, where trading volumes increased 22%.

So, what's driving the boom?

A simpler way to invest

One of the biggest attractions of ASX ETFs is convenience. Instead of trying to identify tomorrow's winning shares, investors can buy one ETF and instantly own a diversified portfolio.

Depending on the fund, that could mean exposure to Australian shares, global companies, bonds, property, or even specific sectors such as healthcare or technology.

Cost is another major advantage. Most ETFs simply track an index, allowing them to charge significantly lower management fees than traditional actively managed funds. Those savings can add up over decades, leaving more of an investor's returns compounding over time.

Many ETFs also pay regular distributions, making them popular with investors seeking passive income. Better still, they're just as easy to buy and sell as any other ASX-listed share.

The market keeps growing

The ETF industry isn't just attracting more investors, it's also offering more choice.

According to ASX data, the number of ETFs listed on the exchange has more than doubled over the past five years to 456 products. Another 72 ETFs launched during the last financial year alone.

Meanwhile, assets invested across Australia's ETF industry have surpassed $350 billion.

Whether investors want exposure to Australian blue chips, global technology leaders, emerging markets, fixed income, or dividends, there's now likely an ASX ETF that fits the bill.

More choice isn't always better

The explosion in new products also means investors need to be more selective. As demand has grown, fund managers have rushed to launch ASX ETFs targeting the latest investment themes.

Artificial intelligence is the newest example. Funds such as the Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ), and VanEck Global Defence ETF (ASX: DFND) all offer exposure to companies expected to benefit from AI.

While these thematic ETFs can be appealing, they often carry greater risk than broad-market index funds. Many own relatively concentrated portfolios, and some launch only after a sector has already enjoyed a strong rally.

Foolish takeaway

The rise of ASX ETFs reflects a growing preference for simple, diversified, and low-cost investing.

But investors shouldn't assume every ETF is a good investment. Choosing a well-diversified, high-quality fund remains just as important as deciding to invest through ETFs in the first place.

The post Why millions of Aussies are switching to ASX ETFs appeared first on The Motley Fool Australia.

Today, around two million Australians invest through ASX ETFs, attracted by their simplicity, low costs and ability to gain instant diversification without having to pick individual shares or hire an expensive fund manager.

And the momentum is only building. According to ASX data, ETF trading activity increased 26% during the last financial year, comfortably outpacing the broader sharemarket, where trading rose 22%.

So, what's behind the surge, and are there any risks investors should keep in mind?

Why investors love ASX ETFs

The appeal of ASX ETFs is easy to understand. Instead of researching dozens of companies, investors can buy a single ETF and instantly gain exposure to hundreds of shares, bonds or other assets.

Some track the entire Australian sharemarket. Others focus on global shares, technology, healthcare, dividends or specific investment themes.

Fees also tend to be significantly lower than those charged by actively managed funds because most ETFs simply track an index rather than trying to outperform it.

For long-term investors, that combination of diversification, transparency and low costs has proven incredibly attractive.

Many ETFs also pay regular distributions, making them popular with income-focused investors and retirees.

Perhaps most importantly, they're easy to buy. Investors can purchase ETFs through the ASX in exactly the same way they buy ordinary shares.

The market keeps getting bigger

It's not just investor numbers that are climbing. The number of ETFs listed on the ASX has more than doubled over the past five years to 456 products. Last financial year alone saw another 72 ASX ETFs launched, according to ASX data.

Meanwhile, funds under management across Australia's ETF industry have now surpassed $350 billion, highlighting just how quickly the sector has matured.

That's good news for investors because it provides more choice than ever before. Whether someone wants exposure to Australian blue-chips, US technology giants, emerging markets or fixed income, there's now likely to be an ASX ETF designed for that purpose.

More choice also means more risk

However, rapid growth brings its own challenges. As investor demand continues rising, fund managers are racing to launch new products targeting the latest investment trends.

Artificial intelligence has become the newest battleground.

Several ASX ETF providers have recently launched AI-focused funds that promise investors exposure to companies expected to benefit from the AI revolution. Examples include the Global X Artificial Intelligence ETF (ASX: GXAI), the Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) and the VanEck Global Defence ETF (ASX: DFND), which also has meaningful exposure to AI-driven defence technologies.

While thematic ETFs can provide targeted exposure to exciting industries, they often carry higher risks than broad-market index funds. Many hold relatively concentrated portfolios, while others launch after a sector has already experienced a significant rally.

In other words, investors may end up buying into yesterday's hottest trend rather than tomorrow's biggest opportunity.

Foolish takeaway

The growth of ASX ETFs reflects a broader shift towards simple, low-cost investing. With two million Australians now using ETFs and more than $350 billion invested in the sector, they have become a mainstream way to build long-term wealth.

But as the number of available products continues to explode, investors should remember that not all ETFs are created equal. Choosing a diversified, well-constructed fund remains just as important as deciding to invest in an ETF in the first place.

The post ASX ETFs are booming. Should you join in? appeared first on The Motley Fool Australia.

The ex-dividend date for the distributions listed below is next Wednesday, 1 July. The record date is 2 July.

The indicative payment date for most of these ETFs is 27 July.

There are some absolute whopper dividends available for investors who own or buy these ASX ETFs before their ex-dividend dates.

Let's take a look.

How does a 14% to 16% dividend yield in a single payment sound?

The stand-out is VanEck Morningstar Wide Moat (AUD Hedged) ETF (ASX: MHOT), which will pay $20.54 per unit.

That's not a typo.

Today, the MHOT ETF is $138.40 per unit, which means this next distribution, on its own, represents a 14.8% dividend yield.

Let's just take a moment to let that soak in.

Also paying a massive dividend this time around is VanEck Gold Miners ETF (ASX: GDX).

GDX ETF will pay $17.99 per unit.

At the time of writing, ASX GDX is $111.09 per unit, which means the next dividend represents a 16.2% yield.

Why are these payments so big?

In the case of MHOT, this next dividend is the fruits of mainly US companies with major competitive advantages (moats), benefiting from a record-high market, turbocharged by the US dollar's weakness against an ascendant Aussie dollar this year.

In the case of GDX, the dividend is the result of miners' supercharged earnings from a skyrocketing gold price over the past two years.

Other dividends for VanEck ASX ETF investors

Here is a condensed list of estimated distributions that VanEck will pay ASX ETF investors on 27 July.

VanEck Morningstar Wide Moat ETF (ASX: MOAT) will pay $11.61 per unit.

The VanEck MSCI International Value ETF (ASX: VLUE) will pay $6.65 per unit.

VanEck MSCI Multifactor Emerging Markets Equity ETF (ASX: EMKT) will pay $4.64 per unit. 

The VanEck Morningstar International Wide Moat ETF (ASX: GOAT) will pay $2.68 per unit.

VanEck MSCI International Quality ETF (ASX: QUAL) will pay $2.16 per unit.

The VanEck Video Gaming and Esports ETF (ASX: ESPO) will pay $1.93 per unit.

VanEck Global Defence ETF (ASX: DFND) will pay $1.20 per unit. 

The VanEck FTSE China A50 ETF (ASX: CETF) will pay $1.19 per unit.

VanEck MSCI International Sustainable Equity ETF (ASX: ESGI) will pay $1.02 per unit.

But wait, there's more!

VanEck Australian Property ETF (ASX: MVA) will pay 79 cents per unit.

The VanEck MSCI Australian Sustainable Equity ETF (ASX: GRNV) will pay 65 cents per unit.

The VanEck Australian Resources ETF (ASX: MVR) will pay 56 cents per unit.

VanEck Small Companies Masters ETF (ASX: MVS) will pay 27 cents per unit.

The VanEck Australian Banks ETF (ASX: MVB) will pay 15 cents per unit.

VanEck MSCI International Small Companies Quality ETF (ASX: QSML) will pay 13 cents per unit.

The VanEck 5-10 Year Australian Government Bond ETF (ASX: 5GOV) will pay 12 cents per unit.

VanEck Global Clean Energy ETF (ASX: CLNE) will pay 7 cents per unit.

The VanEck Global Healthcare Leaders ETF (ASX: HLTH) will pay 4 cents per unit.

The post Own GDX, MOAT, or ESPO? VanEck just announced ASX ETF dividends appeared first on The Motley Fool Australia.

If exchange traded funds (ETFs) are on your shopping list and you have $5,000 to invest, then it could be worth checking out these three ASX ETFs listed below. Here's what they offer:

Betashares S&P/ASX Australian Technology ETF (ASX: ATEC)

The first ASX ETF to look at is the Betashares S&P/ASX Australian Technology ETF.

This fund gives investors exposure to Australia's technology sector in one trade.

That makes it quite different from many local share market funds, which are often dominated by banks, miners, supermarkets, and large industrial companies.

The Betashares S&P/ASX Australian Technology ETF opens the door to businesses that are helping digitise the economy. That can include software companies, online marketplaces, data-driven businesses, and technology-enabled platforms.

Australia has produced several impressive technology companies, and the market could produce more as businesses continue shifting processes, payments, data, and customer interactions online.

For investors who want local exposure but do not want another fund shaped mainly by traditional blue chips, it could offer something different.

VanEck Global Defence ETF (ASX: DFND)

Another ASX ETF that could be worth considering is the VanEck Global Defence ETF.

This fund gives investors exposure to listed global companies involved in the defence industry.

The investment case here is not built around a short-term market fad. Defence spending is being shaped by geopolitical tension, military modernisation, cybersecurity needs, supply chain security, and the push by governments to strengthen national capability.

That can create long-term demand for companies involved in aerospace, defence systems, communications, surveillance, naval technology, and related equipment.

This is a more specialised ETF, so it should be expected to move differently from a broad market fund.

As a result, it may appeal to investors who believe defence will remain a strategic priority for governments over the next decade. However, it also comes with sector concentration risk, as performance will be tied closely to spending cycles, contracts, policy decisions, and global security conditions.

VanEck MSCI International Quality ETF (ASX: QUAL)

A third ASX ETF to dig deeper into is the VanEck MSCI International Quality ETF.

This fund is designed for investors who want global exposure but with a quality filter.

It focuses on international companies with stronger financial characteristics. That can mean businesses with solid profitability, healthier balance sheets, and more dependable earnings profiles.

That quality screen can be useful when markets are uncertain. Companies with strong financial foundations often have more flexibility. They can keep investing, protect margins, and manage harder conditions without being forced into short-term decisions.

All in all, it could be a strong option for investors wanting international diversification with a quality focus.

The post Where to invest $5,000 in ASX ETFs in July appeared first on The Motley Fool Australia.

The staunch US 'America First' policy under US President, Donald Trump, exacerbated it.

NATO's massive commitment last year to more than double its defence spending from 2% of GDP to 5% within 10 years reflected it.

And today, the Iran war has brought defence capabilities into even sharper focus, says CommSec analyst, James Gruber.

Defence spending continues to rise

In an article, Gruber says global defence spending has increased by almost 30% over three years – the fastest rise since the 1980s.

This has directly impacted the earnings of ASX defence companies, whose share prices have soared since 2022.

In 2024, the global defence spending trend was strong enough to warrant the launch of three exchange-traded funds (ETFs) on the ASX.

Then came the Iran war, which further highlighted the need for domestic defence capacity, not to mention energy security, for all nations.

ASX defence shares and ETFs had a particularly strong run in 2024 and 2025.

They have cooled in 2026, alongside the rest of the market, despite the Iran war keeping the defence theme front of mind for investors.

Bearing in mind that many factors can influence a company's stock value, let's take a look at the share price movements of four ASX defence shares and three thematic ASX ETFs since 2022, and also since the Iran war began on 28 February, to get an idea of the impact.

Austal Ltd (ASX: ASB)

Austal is an Australian defence shipbuilder and services provider that builds ships for the Australian Navy, US Navy, and other clients.

The Austal share price has doubled over the past four years. The ASX defence share hit a record $8.82 in January.

The Iran war began on 28 February. Since then, Austal stock has dropped 22% to $4.01 per share.

Droneshield Ltd (ASX: DRO)

Droneshield is a counter-drone technology company that makes drone defence systems.

Gruber says DroneShield has a niche, offering a range of equipment for detection and neutralisation, and aims to be a one-stop shop.

The Droneshield share price has soared 1,133% over the past four years. The ASX defence share hit a record $6.71 in October.

Since the Iran war began, Droneshield shares have fallen 18% to $2.96 per share.

Titomic Ltd (ASX: TTT)

Titomic manufactures lightweight titanium parts and provides industrial-scale metal additive solutions.

These solutions include its patented Titomic Kinetic Fusion cold spray technology for fast repairs of military equipment.

The Titomic share price has leapt 145% since 2022. The ASX defence share hit a 52-week high of 36 cents in October.

Since the Iran war began, Titomic shares have lifted 17% to 25 cents apiece today.

Electro Optic Systems Holdings Ltd (ASX: EOS)

Electro Optic specialises in advanced weapon systems, counter-drone solutions, and space domain awareness.

The Electro Optic Systems share price has ripped 468% since 2022. The ASX defence share hit a record $12.58 in March.

Since the Iran war began, Electro Optic Systems shares have risen 20% to $10.80 today.

What about ASX defence ETFs?

The following three ASX ETFs were launched in 2024. Let's take a look at their performance.

Vaneck Global Defence ETF (ASX: DFND)

DFND ETF holds just 36 shares and tracks the MarketVector Global Defence Industry (AUD) Index before fees.

DFND ETF is 75% higher since inception in September 2024. The ASX defence ETF hit a record $45.47 per unit in January.

Since the Iran war began, DFND ETF units have drifted 11% lower to $35.25 today.

Global X Defence Tech ETF (ASX: DTEC)

ASX DTEC invests in 37 shares and seeks to track the Global X Defense Tech Index before fees.

The DTEC ETF price has increased 59% since inception in October 2024. The ASX defence ETF hit a record $21.50 in January.

Since the Iran war began, DTEC ETF units have fallen 16% to $15.96.

Betashares Global Defence ETF (ASX: ARMR)

ASX ARMR invests in up to 60 companies headquartered in NATO nations or allied countries, such as Australia and Japan.

It seeks to mirror the returns of the VettaFi Global Defence Leaders Index before fees.

ARMR ETF units have ascended 55% since launching in October 2024. The ASX defence ETF hit a record $29.35 in January.

Since the Iran war began, ARMR ETF units have descended 11% to $23.50 today.

The post Iran war impact on ASX defence shares and ETFs appeared first on The Motley Fool Australia.

For those with $5,000 to invest, ASX exchange traded funds (ETFs) can make the job easier. They provide exposure to a basket of companies in a single trade, which can reduce the pressure of picking the perfect stock.

The three ASX ETFs below each offer something different. Here's why they could be worth considering next month:

VanEck China New Economy ETF (ASX: CNEW)

The first ASX ETF to look at is the VanEck China New Economy ETF.

It focuses on companies tied to China's new economy rather than the old economy areas that have struggled with debt, construction, and heavy industry headwinds.

This means exposure to businesses involved in areas such as consumption, healthcare, technology, and innovation. These sectors are linked more closely to rising incomes, digital adoption, and the gradual shift in China's economy toward services and domestic demand.

There are still risks. China can be volatile, and policy changes can have a big impact on investor confidence. But this fund offers a targeted way to gain exposure to a market that could surprise on the upside if sentiment improves.

The VanEck China New Economy ETF was recently recommended by analysts at VanEck.

VanEck Global Defence ETF (ASX: DFND)

Another ASX ETF that could be worth considering in June is the VanEck Global Defence ETF.

Defence has moved from a background issue to a front-page investment theme. Governments across the world are reassessing military readiness, supply chains, cyber resilience, and national security priorities.

This fund gives investors exposure to companies operating across the global defence industry. That can include businesses involved in aerospace, defence systems, electronics, communications, surveillance, and security technologies.

What makes this theme powerful is that defence spending is often driven by government budgets and long-term strategic priorities, rather than short-term consumer demand.

And with geopolitical tensions still elevated, defence could remain a major area of investment for years.

It was also recently recommended by the fund manager.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

A third ASX ETF to consider is the Betashares Global Robotics and Artificial Intelligence ETF.

This fund gives exposure to the companies building the tools that help machines do more work. That includes robotics, automation, industrial technology, and artificial intelligence.

The opportunity is not limited to futuristic robots. Automation is already changing factories, warehouses, hospitals, logistics networks, and agriculture. Businesses are under pressure to lift productivity, manage labour shortages, and reduce errors.

This fund provides a diversified way to access that shift without relying on one company to get everything right.

It can be volatile, particularly when growth shares fall out of favour. But over the next decade, the demand for smarter machines and automated systems looks likely to keep building.

This ASX ETF was recommended by the team at Betashares recently.

The post Where to invest $5,000 in ASX ETFs in June 2026 appeared first on The Motley Fool Australia.

In a new report, Wickenden says the longer-term impact of the Iran war will centre around global energy self-sufficiency.

Investors have responded by ploughing funds into 5 ASX ETF thematics.

Let's take a look.

Energy producers

An example is the Global Energy Companies Currency Hedged ETF (ASX: FUEL), which is 30% higher in the year to date (YTD).

Another example is the commodity-price-based energy ETF, Betashares Crude Oil Index Currency Hedged Complex ETF (ASX: OOO).

OOO ETF was the best performer among the more than 400 ASX ETFs on the market last month, returning 55% due to the global oil shock.

Uranium

Betashares offers investors the Global Uranium ETF (ASX: URNM), which is up 15% in the YTD.

The uranium arena is volatile, however, James Gerrish from Market Partners says small modular reactors are the way of the future.

In a recent Money Matters newsletter, Gerrish said:

Nuclear power accounts for ~10% of global electricity generation today with demand set to rise substantially over the coming years as AI usage ratchets up.

With the uranium market transitioning into a structural tightening phase, and a high probability of deficit emerging later this decade, the URNM ETF should push higher in the coming years.

Defence

Vaneck Global Defence ETF (ASX: DFND) is one of the most popular defence ETFs on the market today.

DFND ETF has risen 34% over the past 12 months amid NATO committing to a substantial lift in defence spending at America's urging.

Critical minerals

Australia's last mining boom, from the early 2000s through to 2013, was mainly driven by iron ore and coal exports to China.

Experts say the next one already underway is being driven by critical minerals tied to electrification, power generation, and energy security.

They include copper, uranium, lithium, rare earths, and silver.

Betashares Energy Transition Metals ETF (ASX: XMET) was among the 6 best-performing international shares-based ASX ETFs last year.

XMET ETF delivered a 100% return while Global X Green Metal Miners ETF (ASX: GMTL) returned a similarly impressive 81%.

Agricultural commodities

The oil shock has sparked concern over the global supply of fertiliser, which is crucial for crop production.

Natural gas is a key feedstock for nitrogen-based fertilisers like ammonia and urea.

This means higher oil and gas prices can significantly increase fertiliser costs.

Betashares offers the Global Agriculture Companies Currency Hedged ETF (ASX: FOOD), which has risen 41% over the past year.

The post 5 thematics driving ASX ETF investment today: expert appeared first on The Motley Fool Australia.

Ongoing conflicts in regions like Ukraine and the Middle East are creating uncertainty. Energy markets remain volatile, fuelling concerns about inflation. And here in Australia, cost of living pressures are at the forefront of households' minds.

When headlines are dominated by fear, it becomes harder to stay optimistic — and even harder to stay consistent with an investment plan.

Yet history suggests this is exactly when simple strategies matter most.

Markets have always climbed a wall of worry

It is easy to believe that "this time is different".

The current backdrop — geopolitical tensions, rising fuel costs, and inflation — feels uniquely challenging. But zooming out tells a very different story.

Over the past century, equity markets in both Australia and the United States have navigated:

• World wars
• Oil shocks
• Financial crises
• Pandemics
• Political instability

And yet, broad indices like the S&P/ASX All Ordinaries Index (ASX: XAO) and major US benchmarks have continued to trend higher over time.

This phenomenon is often described as the "wall of worry" — markets advancing despite a constant stream of negative news.

The key insight is simple: short-term fear is persistent, but long-term progress in businesses and economies has historically been more powerful.

The strategy that gets hardest when it matters most

Dollar-cost averaging is often described as one of the simplest ways to invest.

Invest regularly. Ignore short-term noise. Let time and compounding do the heavy lifting.

But the reality is more nuanced.

This approach becomes most difficult during market declines — precisely when it is most powerful.

When markets fall, sentiment weakens. Confidence drops. The instinct to pause or wait for clarity kicks in.

Yet those periods often produce the most attractive long-term entry points.

Buying when prices are lower sounds easy. Continuing to do so when the news cycle is negative is where discipline is tested.

A practical framework: building a core and adding conviction

One way to stay grounded through volatility is to structure a portfolio deliberately.

A commonly used approach is the core and satellite strategy — a framework that balances stability with opportunity.

The core: broad exposure that does the heavy lifting

At the centre of the portfolio sits a diversified foundation, typically built using broad-market ETFs.

For Australian investors, that often includes:

• Vanguard MSCI International Shares ETF (ASX: VGS) – exposure to around 1,500 global companies
• BetaShares Australia 200 ETF (ASX: A200) – coverage of Australia's largest listed businesses
• iShares S&P 500 ETF (ASX: IVV) – access to leading US companies
• VanEck Morningstar Wide Moat ETF (ASX: MOAT) – focused on businesses with durable competitive advantages

These types of holdings are designed to capture long-term economic growth across markets, sectors, and geographies.

They are not about chasing the next big winner. They are about participating in the broader progress of global business over time.

The satellites: targeted ideas around the edges

Around that core, investors can allocate a smaller portion to higher-conviction ideas.

This could include individual companies or thematic ETFs such as:

• BetaShares Global Cybersecurity ETF (ASX: HACK)
• VanEck Global Defence ETF (ASX: DFND)

These positions bring focus and potential upside, particularly in areas benefiting from structural tailwinds like digital security, defence spending, or large-scale technology adoption.

The key is proportion.

The core provides stability and consistency. The satellites introduce variability and opportunity.

Why this approach fits today's environment

In uncertain periods, complexity often increases.

Investors are tempted to react — shifting allocations, chasing trends, or waiting for clarity that rarely comes.

A structured approach helps cut through that noise.

• The core ensures you remain invested in long-term growth
• The satellites allow you to express views without overexposing your portfolio
• Dollar-cost averaging keeps capital flowing consistently

Importantly, this framework does not rely on predicting macro events — something even professionals struggle to do consistently.

Foolish takeaway

The current environment feels challenging, but uncertainty has always been part of investing.

Markets have moved forward through decades of conflict, inflation shocks, and economic cycles.

For investors, the real edge often comes from consistent behaviour.

Simple strategies like dollar-cost averaging, combined with a clear core and satellite structure, can help maintain that discipline.

Because in many cases, the moments that feel hardest to invest are the ones that matter most over the long term.

The post This simple ASX ETF strategy matters more than ever in today's uncertain market appeared first on The Motley Fool Australia.

For me, exchange-traded funds (ETFs) are a straightforward way to build a diversified portfolio without having to rely on picking individual stocks. 

The key is combining broad exposure with a few targeted themes that could drive returns over time.

Here's why I'd be thinking about allocating that capital evenly across these five ETFs today.

Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)

I'd start by making sure I have exposure to Asia. The Vanguard FTSE Asia Ex-Japan Shares Index ETF gives access to major economies like China, India, Taiwan, and South Korea. These regions are home to some of the fastest-growing economies in the world, and I think that long-term growth is hard to ignore.

There will always be volatility here, especially with geopolitical tensions and policy uncertainty. But over time, I think rising middle classes, urbanisation, and technological development could drive strong economic expansion.

iShares Global 100 AUD ETF (ASX: IOO)

For global blue-chip exposure, I'd look at the iShares Global 100 AUD ETF.

This ASX ETF holds some of the largest and most established companies in the world. These are businesses with strong balance sheets, global reach, and proven earnings power.

I like this as a core holding because it provides stability and diversification across industries and geographies. It's not about chasing the fastest growth, but about owning high-quality companies that can compound over time.

In a volatile environment, I think having that kind of foundation is important.

Betashares Australian Quality ETF (ASX: AQLT)

Closer to home, I'd want exposure to high-quality ASX shares.

The Betashares Australian Quality ETF focuses on businesses with strong returns on equity, solid balance sheets, and consistent earnings. In my view, those characteristics tend to hold up better during uncertain periods.

Rather than simply tracking the broader market, this ETF leans into quality, which I think can make a difference over the long term.

It also complements global exposure by ensuring part of the portfolio is invested in Australian companies with strong fundamentals.

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

For growth, I'd include the BetaShares S&P/ASX Australian Technology ETF.

This ASX ETF provides exposure to a range of ASX-listed tech shares, including names that have been sold off heavily in recent periods. That volatility can be uncomfortable, but it can also create opportunities.

I think technology remains a key driver of long-term economic growth, and having some exposure to that theme makes sense. The businesses in this ETF won't all succeed, but the sector itself is likely to keep evolving and expanding.

VanEck Global Defence ETF (ASX: DFND)

Finally, I'd include a thematic allocation to defence through the VanEck Global Defence ETF.

With geopolitical tensions remaining elevated, defence spending is increasing across many parts of the world. That's not a short-term trend in my view, but something that could persist for years.

This ETF provides exposure to companies involved in defence and security, which are benefiting from that shift in government spending.

It's a more specialised investment, but I think it adds diversification and taps into a structural trend that isn't closely tied to typical economic cycles.

Foolish takeaway

This kind of $50,000 ETF portfolio blends broad market exposure with a handful of targeted growth themes.

There will be periods where some parts lag, particularly higher-growth areas like technology or emerging markets. But over time, I think this mix gives a solid foundation while still leaving room for stronger returns if those themes play out.

The post Where I'd invest $50,000 into ASX ETFs today appeared first on The Motley Fool Australia.

A new report from VanEck has shed light on the sectors that may hold up in this current environment. 

Global energy fragility 

According to VanEck, The Middle East crisis has reinforced how fragile global energy security is, particularly given Iran's role in oil production and the Strait of Hormuz chokepoint. 

As a result, investors are wondering how best to position themselves for the turmoil.

VanEck said we may be moving from a short-lived shock to a conflict that could last months, disrupting crude oil and LNG supply and affecting the energy system's core infrastructure, transport, production, and refining.

We think gold, defence, commodities and quality are structurally positioned for this environment.

Gold still a safe-haven 

VanEck said gold is supported by central bank accumulation, fiscal deterioration and geopolitical uncertainty.

Since the crisis broke out, gold has risen back above US$5,200/oz on safe-haven demand, and we think it is expected to push further.

According to the report, the structural drivers for gold, central banks accumulating at the fastest pace since Bretton Woods, US fiscal deterioration and the slow unwinding of dollar hegemony were in place before the Middle East conflict. 

The Strait of Hormuz threat, if it materialises, introduces the prospect of an inflationary oil shock on top of an already uncertain rate environment. That combination, geopolitical uncertainty plus inflation risk, is an environment in which gold has historically performed best.

For investors looking to gain exposure to gold shares, options include: 

• Vaneck Gold Bullion ETF (ASX: NUGG)
• VanEck Vectors Gold Miners ETF (ASX: GDX) – gives investors instant access to 92 of the largest and most liquid global gold mining companies.

Defence 

VanEck also noted defence spending was already in a structural upcycle; the conflict has accelerated the long-term repricing of security.

In terms of defence, if investors think long-term yields are near their highs, they could consider layering in duration, at the same time, with short-term rates rising, the yields on floating rate exposures will increase as rates rise. In addition, US Treasuries offer a potential portfolio hedge against risk-off periods and periods of rising rates.

ASX ETFs to consider in this sector include: 

• Vaneck Global Defence Etf (ASX: DFND)
• Betashares Global Defence ETF – Beta Global Defence ETF (ASX: ARMR). 

More information on global defence ETFs can be found here.

Energy and quality 

Furthermore, demand for traditional energy has increased, and investors are once again turning to traditional resources as well as critical minerals for strategic portfolio exposures. 

In terms of quality investing: 

The uncertainty creates volatility and quality companies tend to do relatively well in these environments as investors seek companies with stronger balance sheets and stable earnings.

Real assets also tend to perform relatively well because they provide tangible, consistent cash flows and act as inflation hedges.

For investors seeking energy and quality focussed exposure: 

• VanEck Vectors Msci World Ex Australia Quality ETF (ASX: QUAL)
• VanEck Australian Resources ETF (ASX: MVR)

The post How to position your ASX portfolio in the current environment – Expert appeared first on The Motley Fool Australia.

Trying to time the market when there are shocks such as this can be a bit of a fool's game. Instead, if you believe that global instability is likely to remain high and want to take a long-term view, it's reasonable to infer that global defence spending will also remain higher than normal, and that energy prices might stay high.

On the spending front this is indeed the case with many countries around the world looking to bolster their armed forces following less confidence in global alliances.

So where does that leave investors?

On the Australian market there are some defence-specific stocks such as Austal Ltd (ASX: ASB), DroneShield Ltd (ASX: DRO) and Electro Optic Systems Ltd (ASX: EOS), but if you're looking for less volatility, the following defence ASX ETFs might be the way to go.

Global X Defence ETF (ASX: DTEC)

DTEC ETF is a fairly modestly-sized defence ETF which says in its fact sheet that global defence spending has grown at an annualised rate of 4.3% for the past 40 years.

It goes on to say:

Increasing global tensions are driving nations to boost defence spending, reflecting heightened national security concerns and a competitive push to maintain strategic advantage.

DTEC says it invests in companies "with a revenue filter' with exposure to AI, drones and cybersecurity, "capturing the future of innovation in defence".

VanEck Global Defence ETF (ASX: DFND)

DFND ETF is quite different from the previous ASX ETF, in that it specifically aims to invest in larger companies that generate at least 50% of their revenues from the defence sector.

The companies it invests in must have a market capitalisation greater than US$1 billion and a 3-month average daily trading volume of at least US$1 million.

This defence ETF has $315.4 million in net assets currently and is invested into 36 companies.

DFND says it provides, "exposure to the largest global companies involved in aerospace and defence, research and consulting, application software and electronic equipment & instruments, that are typically under-represented in benchmarks''.

Betashares Global Defence ETC (ASX: ARMR)

ARMR ETF currently has a wider remit still, providing exposure to "up to 60" global companies which derive more than 50% of their revenues from defence.

At the moment these companies include BAE Systems, Lockheed Martin, General Dynamics and Palantir Technologies.

ARMR will only invest in companies which are headquartered in NATO or NATO-allied countries.

Betashares Global Energy Companies Currency Hedged ETF (ASX: FUEL)

And finally, if you're looking for broad exposure to the energy sector, this Betashares ASX ETF provides just that, investing globally into companies including Chevron, ExxonMobil and Shell.

The post If you think global instability will persist, these ASX ETFs might be for you appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) has fallen 3.2% so far this week while the S&P 500 Index (SP: .INX) has fallen 1%. 

Yesterday was somewhat of a bloodbath for the ASX 200 which dropped 1.94%, marking for one of the worst single day drops in months. 

A new report from Global X has shed light on the sectors and subsequent ASX ETFs that investors have been flocking to amidst this heavy volatility.

Investors push further into safe-haven assets 

Gold shares have continued to be a top pick for investors, following on from last year's momentum.

Gold climbed 2% higher on Wednesday and now sits almost 78% higher than 12 months ago. 

Safe-haven assets typically maintain value even during economic uncertainty, so investors often flock to them when financial markets become volatile.

According to Global X, despite a two year rally for gold, the pace is not unprecedented. 

In 2024-26, we have observed a very constructive environment for gold, with significant geopolitical volatility, falling interest rates, a poorer economic outlook and an increasing narrative around de-dollarisation. 

The recent market volatility triggered by AI disruption in software, combined with the fresh risk of an energy shock and inflationary pressures stemming from US and Israel's attack on Iran, have added on top of that bullish environment new developments which look strikingly similar to the late 70s rally and may be the final tipping point that potentially triggers a gold supercycle in which there is sustained, strong outperformance.

Global X said in the short term, it believes markets are underpricing the risk of a dragged-out, sustained conflict in Iran, which could translate to persistently high energy prices that lead to stickier and hotter inflation and, in turn, complicate the rate path for the Federal Reserve and risk an economic downturn.

Defence and Energy also worth monitoring

Global X also reinforced that the world is increasingly operating in a Cold War framework, with sustained military modernisation across the US, Europe and parts of Asia. 

Spending is also shifting toward defence technology, including missile systems, drones, cyber and AI-enabled capability. That creates a multi-year tailwind that is less cyclical and more policy-driven than traditional industrial demand.

Additionally, energy sits at the centre of this escalation because the Middle East remains critical to global supply and Asia remains structurally dependent on Gulf flows.

It said structurally this reinforces the case for energy security, LNG infrastructure and diversified supply.

How do investors access these themes?

For investors looking for exposure to gold, some ASX ETFs to consider include: 

• Global X Physical Gold Structured (ASX:GOLD) – Mirrors the growth in the Australian dollar gold price. 
• BetaShares Global Gold Miners ETF – Currency Hedged (ASX: MNRS) – Targets largest global gold mining companies (ex-Australia).
  
  

Energy focussed ASX ETFs to consider include: 

• The Global X Bloomberg Commodity Complex ETF (ASX: BCOM)
• BetaShares Global Energy Companies ETF – Currency Hedged (ASX: FUEL)
  
  

For defence focussed ASX ETFs: 

• The Global X Defence Tech ETF (ASX: DTEC)
• Betashares Global Defence ETF – Beta Global Defence ETF (ASX: ARMR)
• Vaneck Global Defence Etf (ASX: DFND). 

Foolish takeaway 

It's important to point out that despite investors pushing into these themes, there is no guarantee these sectors will rise as a direct result of current conflicts. 

Predicting how markets respond to global conflict is inherently uncertain, and short-term sector moves are often driven by sentiment as much as fundamentals. 

While capital may rotate into perceived "beneficiaries," there is no guarantee those trends will persist once conditions stabilise or new information emerges.

The post Which ASX ETFs are investors flocking to amidst volatility? appeared first on The Motley Fool Australia.

One theme that has attracted increasing attention is global defence and aerospace. 

For investors looking into that sector, there are now several ASX-listed defence ETFs.

Why global defence on the radar

Geopolitical tensions, strategic competition between major powers, and global conflicts have led to sustained increases in defence budgets across the US, Europe and parts of Asia. 

Countries are committing to multi-year procurement programs covering aircraft, missile systems, naval fleets, cybersecurity and space capabilities.

For investors, this can translate into long-duration revenue pipelines for major contractors.

This phenomenon is also happening here in Australia.

What constitutes defence?

For the average punter, a defence company might be one that manufactures weapons, military planes, navy ships etc. 

However modern defence is no longer limited to tanks and fighter jets. 

It now includes cybersecurity, artificial intelligence, satellite systems, autonomous vehicles and advanced electronics. 

Some ETFs tilt toward these next-generation technologies, giving exposure to both traditional defence primes and emerging defence-tech players.

It's also important to point out that defence contractors often operate under government contracts, which can provide relatively stable cash flows compared with cyclical sectors.

What are the best ASX defence ETFs?

For investors looking for exposure to this sector, right now there are three ASX ETFs to consider: 

• Betashares Global Defence ETF – Beta Global Defence ETF (ASX: ARMR)
• Vaneck Global Defence Etf (ASX: DFND)
• Global X Defence Tech ETF (ASX:DTEC). 

All three are global in scope – they invest predominantly in international defence and aerospace companies.

What's the difference?

The Betashares Global Defence ETF provides exposure to 60 companies which derive more than 50% of their revenues from the development and manufacturing of military and defence equipment, as well as defence technology. 

According to Betashares, it only holds global companies headquartered in NATO member and major NATO ally countries. 

This fund has risen 38% in the last year. 

The VanEck fund targets the largest global companies involved in aerospace & defence, research & consulting, application software and electronic equipment & instruments.

It currently includes 36 holdings and has risen roughly 51.8% in the last year. 

Unlike DFND and ARMR, which focus primarily on traditional global defence contractors, The Global X DTEC fund has a stronger tilt toward defence technology and next-generation systems. 

This includes cybersecurity, AI, advanced electronics and autonomous platforms – rather than just large military hardware manufacturers.

The Global X fund is up approximately 49% in the last year. 

Key considerations 

Defence ASX ETFs are still thematic and concentrated and can be sensitive to political developments and budget cycles.

These funds also typically carry higher fees than broad index ETFs.

All three of these funds come with management fees between 0.50% p.a. and 0.65% p.a. 

Finally, it's also worth noting the ethical considerations for some investors, who may wish to target returns elsewhere, not related to global conflict and military spending. 

The post What is the best global defence ASX ETF? appeared first on The Motley Fool Australia.

Last year, we ploughed a net $53 billion of new funds into ETFs, which was 75% higher than 2024, according to Betashares data.

Here are three ASX ETFs that delivered excellent returns last year.

Global X Copper Miners ETF (ASX: WIRE)

Over 2025, WIRE ETF returned 93% and finished the year at $22.20 apiece.

This ASX ETF is having an incredible run on the back of rising global demand for the red metal.

WIRE seeks to mirror the performance of the Solactive Global Copper Miners Total Return Index before fees.

The copper price soared 42% last year and hit a new record above US$6 per pound earlier this month.

Copper is essential for electrification and is playing a huge role in the green energy transition.

WIRE holds 39 stocks and offers good geographical diversification.

Investments are 37% Canada, 11% US, 10% Australia, 10% Hong Kong, 7% Japan, 6% Poland, 5% Sweden, and the list goes on.

The ASX copper shares among WIRE's investments include the ASX 200's largest pure-play, Sandfire Resources Ltd (ASX: SFR), at 3.2%.

BHP Group Ltd (ASX: BHP), the world's largest copper producer, makes up 4% of WIRE's investments.

Capstone Copper Corp CDI (ASX: CSC) shares provide another 3%, and Develop Global Ltd (ASX: DVP) makes up 0.36%.

WA1 Resources Ltd (ASX: WA1) shares are in there, too, at 0.2%.

Vaneck Global Defence ETF (ASX: DFND)

Over 2025, DFND ETF returned 57% and closed out the year at $36.74 apiece.

DFND ETF holds 36 shares and tracks the MarketVector Global Defence Industry (AUD) Index before fees.

The top holding is Thales SA (FRA: CSF), a French company that produces advanced defence electronics and cybersecurity systems.

There's also RTX Corp (NYSE: RTX), a major US aerospace and missile systems manufacturer, and Leonardo SpA (FRA: FMNB), an Italian aerospace and defence company that builds helicopters.

DFND ETF also holds Hanwha Aerospace Co Ltd (KRX: 012450), a South Korean company that makes military aircraft engines, artillery systems, and satellites, and Saab AB (FRA: SDV1), a Swedish aerospace and defence company.

Plato Global Alpha Fund Complex ETF (ASX: PGA1)

Last year, PGA1 ETF returned 31% and finished the year at $36.74 apiece.

PGA1 aims to outperform the MSCI World Net Returns Unhedged Index by 4% per annum, after fees, over the medium to long term.

The ETF holds more than 250 shares.

Andrew Wielandt from DP Wealth Advisory holds this ASX ETF in his self-managed super fund (SMSF).

Wielandt has nearly 30 years of experience in the financial services industry.

Last November, he explained the appeal of this ASX ETF on The Bull:

The Plato Global Alpha Fund, established initially as a managed fund in September 2021, operates as a long/short exchange traded fund.

The fund is overweight in financials and defence and is underweight in materials and energy.

Contributors to its performance in the past 12 months include Nvidia Corp (NASDAQ: NVDA), Microsoft Corp (NASDAQ: MSFT), and Broadcom Inc (NASDAQ: AVGO).

The price of the ETF has been steadily rising since mid-April and I like the outlook.

PGA1 ETF began trading on the ASX in November 2024.

The post 3 ASX ETFs that returned 31% to 93% in 2025 appeared first on The Motley Fool Australia.

There are other options, such as investing in defence companies such as Austal Ltd (ASX: ASB), DroneShield Ltd (ASX: DRO), and Electro Optic Systems Ltd (ASX: EOS).

But if you're looking for more diversification, there are some exchange-traded funds (ETFs) on offer which might be worth a look.

Global outlook

The first one we'll look at is the Betashares Global Defence ETF (ASX: ARMR).

This fund aims to access leading global defence companies aligned with NATO allied countries.

The ARMR website goes on to say:

ARMR provides exposure to up to 60 leading companies which derive more than 50% of their revenues from the development and manufacturing of military and defence equipment, as well as defence technology, including Lockheed Martin, BAE Systems, General Dynamics and Palantir Technologies.

The website adds that global defence and security spending has "significantly increased" in recent times due to evolving geopolitical risks, and the spend is projected to continue for the foreseeable future.

ARMR has delivered an impressive 47.84% one-year return measured at the end of December, and 29.9% over five years.

Second cab off the rank is the Van Eck Global Defence ETF (ASX: DFND).

This ETF aims to give "exposure to the largest global companies involved in aerospace & defence, research and consulting, application software and electronic equipment & instruments, that are typically under-represented in benchmarks''.

The Van Eck website adds:

DFND is likely to be appropriate for a consumer who is seeking capital growth, is intending to use the product as a minor or satellite allocation within a portfolio, has an investment timeframe of at least 5 years, and has a very high risk/return profile.

DFND is up 85.5% from its lows over the past year and is changing hands for $44.85, with the fund valued at $305.3 million.

Another solid performer is the Global X Defence Tech ETF (ASX: DTEC), which "provides investors with access to companies at the forefront of defence innovation''.

The website goes on to say:

As global security concerns shift towards more technology-driven solutions, DTEC captures the sectors driving the future of defence. This includes AI, drones, and cybersecurity – all crucial components in today's modern defence landscape.

DTEC is up 88.4% from its lows over the past year, with the fund valued at $128.5 million.

Then, finally, there is the Betashares Global Cybersecurity ETF (ASX: HACK), which, as the name suggests, aims to give exposure to the best cybersecurity companies globally.

As the Betashares website explains:

With cybercrime on the rise, the demand for cybersecurity services is expected to grow strongly for the foreseeable future. In one trade, get diversified, cost-effective exposure to global cybersecurity companies, a sector that is heavily under-represented on the ASX.

Hack hasn't performed as well as the other defence ETFs and has been trending lower in recent months. That said, it's still up 15.1% from its low point over the past 12 months and, over a three-year horizon, has returned 23.5% per annum.

The post Where to invest as global tensions rise? These ETFs might be worth a look appeared first on The Motley Fool Australia.

This led to many listed defence companies in aerospace, technology, and military equipment segments gaining major value in 2025.

Sara Pineros, a Quantitative Analyst at S&P Dow Jones Indices, said:

Aerospace & Defence ranked as the second-highest growth sector among the S&P Select Industries, posting a significant 46.8% increase, largely driven by rising geopolitical tensions worldwide.

Three ASX exchange-traded funds (ETFs) capturing this theme were launched in late 2024.

Here's how they performed last year.

2025 performance: 3 ASX defence ETFs

Vaneck Global Defence ETF (ASX: DFND)

Over 2025, DFND ETF delivered a capital gain of 56% and closed the year at $36.74 apiece.

With dividends included, this ASX ETF gave a total return of 57%.

DFND ETF holds just 36 shares and tracks the MarketVector Global Defence Industry (AUD) Index before fees.

The top five holdings are Thales SA, RTX Corp, Leonardo SpA, Hanwha Aerospace Co Ltd, and Saab AB.

Thales is a French company that produces advanced defence electronics and cybersecurity systems.

RTX is a major US aerospace and missile systems manufacturer.

Leonardo is an Italian aerospace and defence company that makes helicopters.

Hanwha Aerospace is a South Korean company that makes military aircraft engines, artillery systems, and satellites.

Saab AB is a Swedish aerospace and defence company.

The DFND ETF is $44.30 per unit, up 1.8% on Tuesday.

It has a management fee of 0.65% per annum.

Global X Defence Tech ETF (ASX: DTEC)

Over 2025, DTEC ETF ripped 64% to $17.51 apiece and did not pay a dividend.

ASX DTEC invests in 37 shares and seeks to mirror the Global X Defense Tech Index before fees.

Global X explains DTEC's differentiation from other ASX defence ETFs:

DTEC includes companies with a revenue filter ensuring exposure to AI, drones, and cybersecurity, capturing the future of innovation in defence.

The top five holdings are Lockheed Martin Corp, Rheinmetall AG, RTX Corp, Palantir Technologies Inc, and General Dynamics Corp.

Lockheed Martin builds air force fighter jets, missiles, and satellite systems.

Rheinmetall manufactures army tanks, weapons, and military vehicle systems.

Palantir is an AI and defence software company specialising in data analytics for government and defence industry clients.

General Dynamics builds submarines, combat vehicles, and provides defence IT services.

The DTEC ETF is $20.53 per unit, up 1.7% today.

The annual management fee is 0.5%.

Betashares Global Defence ETF (ASX: ARMR)

Over 2025, ARMR ETF soared 44% to $17.51 apiece and gave a total return of 48%.

ASX ARMR invests in up to 60 companies headquartered in NATO nations or allied countries, such as Australia, Japan, and South Korea.

It tracks the VettaFi Global Defence Leaders Index before fees.

The top five holdings are Lockheed Martin Corp, Rheinmetall AG, Raytheon Technologies Corp, Safran SA, and General Dynamics Corp.

Raytheon Technologies manufactures missiles, radar systems, and aerospace technology.

Safran builds aircraft engines and defence navigation systems.

Today, this ASX ETF is trading at $28.44 per unit, up 2.7%.

The yearly management fee is 0.55%.

The post Which ASX defence ETF performed best in 2025? appeared first on The Motley Fool Australia.

In early 2026, defence-focused investments are back in the spotlight as geopolitical tensions persist and governments commit to unprecedented military budgets. For Australian investors, this has renewed attention on ASX ETFs offering diversified exposure to global defence contractors and military technology leaders.

Two powerful forces are driving this trend.

A world that feels less stable, not more

Despite hopes that the post-pandemic era would bring a more cooperative global environment, reality has moved in the opposite direction.

Cold and hot conflicts continue across Eastern Europe, the Middle East, and Asia-Pacific flashpoints. Meanwhile, major powers including the United States, China, and Japan are actively modernising their military capabilities. Smaller nations are following suit, often under pressure to meet alliance commitments or defend strategic interests.

This environment is pushing defence spending higher — not just as a short-term response, but as part of long-term strategic planning. Governments are investing in missile defence, cybersecurity, autonomous systems, surveillance technology, naval assets, and aerospace platforms. These are multi-decade programs, not one-off purchases.

For investors, that matters. Defence companies often benefit from long contracts, recurring revenue, and government-backed demand that is less sensitive to economic cycles.

A $1.5 trillion signal from the White House

That long-term trend was given fresh momentum this week.

US President Donald Trump announced plans to lift America's military budget by 50% to approximately US$1.5 trillion by 2027, citing global instability and the need to maintain strategic superiority.

To put that number into perspective, it would represent the largest defence budget in history — comfortably exceeding the combined military spending of several major nations.

Markets did not ignore the signal. Global defence stocks rallied sharply following the announcement, with many companies hitting new highs in early 2026. The message was clear: defence spending is not peaking — it is accelerating.

Given the size of the US defence ecosystem, higher American spending tends to flow through supply chains globally, benefiting contractors, subcontractors, and technology providers across multiple regions.

Why these ASX ETFs are in focus

Rather than taking a punt on individual defence stocks, many investors have gravitated toward ASX ETFs that offer broad, rules-based exposure to the global defence supply chain.

Two in particular have stood out.

The VanEck Global Defence ETF (ASX: DFND) has surged more than 75% over the past 12 months, excluding dividends. DFND has a heavier weighting toward US and European defence primes and advanced technology providers, reflecting where the bulk of global defence spending is flowing. Its portfolio includes exposure across missile systems, aerospace, intelligence software, and next-generation defence platforms, with a strong tilt toward companies embedded in long-term NATO and allied procurement programs.

By contrast, the Betashares Global Defence ETF (ASX: ARMR) — up over 60% in the past year, excluding dividends — takes a slightly broader approach. While it also holds many of the world's largest aerospace and defence contractors, ARMR's construction places more emphasis on diversified military hardware and infrastructure suppliers, offering exposure across traditional defence manufacturing alongside newer areas such as surveillance, communications, and security technology.

Not without risks, but supported by structural demand

As with any thematic investment, defence is not risk-free. Valuations across the sector have risen, and political sentiment can shift over time. Defence companies also operate in an environment where delays, cost overruns, or policy changes can impact earnings.

However, the structural backdrop remains supportive. Governments rarely slash defence spending during uncertain times, and modern warfare increasingly relies on advanced technology rather than manpower alone. That trend favours ongoing investment, not retrenchment.

Foolish Takeaway

AI may still command the spotlight, but defence spending is shaping up as one of the most durable investment themes of the decade.

With global tensions unresolved and the world's largest economy preparing to spend US$1.5 trillion on its military, the tailwinds behind defence-focused ETFs look set to persist well beyond 2026.

For investors seeking diversified exposure to this powerful megatrend, defence ETFs remain firmly on the radar.

The post Forget AI – these ASX ETFs are riding a global megatrend with years of tailwinds ahead appeared first on The Motley Fool Australia.

Here are three options for Australian investors to consider.

ASX ETFs leveraging rising global defence spending

Vaneck Global Defence ETF (ASX: DFND)

The DFND ETF is $39.18 per unit, up 0.6% on Thursday.

Since inception on 10 September last year, this ASX ETF has delivered an average annual total return of 92%.

DFND ETF holds just 32 shares and seeks to mirror the performance of the MarketVector Global Defence Industry (AUD) Index.

The top five holdings are RTX Corp, Palantir Technologies Inc, Thales SA, Leonardo SpA, and Hanwha Aerospace Co Ltd.

RTX is a significant United States aerospace and missile systems manufacturer.

US-based Palantir is an AI and defence software company specialising in data analytics for government and defence industry customers.

Leonardo is an Italian aerospace and defence company that makes helicopters.

Thales is a French multinational company that produces advanced defence electronics and cybersecurity systems.

Hanwha Aerospace is a South Korean company that makes military aircraft engines, artillery systems, and satellites.

This ASX ETF pays dividends (or 'distributions') 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 $18.54 per unit, up 0.5% today.

Since inception on 7 October last year, this ASX ETF has delivered an average annual total return of 79%.

ASX DTEC is a defence technology-focused ETF. It's invested in 37 shares and tracks the Global X Defense Tech Index before fees.

In an article, Global X said:

We believe the global defence industry is entering a super-cycle, shaped by geopolitical urgency and a structural pivot toward technology-first military capabilities. 

Currently, the top five holdings are Palantir, RTX Corp, Rheinmetall AG, Lockheed Martin Corp, and BAE Systems PLC.

Rheinmetall manufactures army tanks, weapons, and military vehicle systems.

BAE Systems builds navy ships and develops combat systems and cyber defence technologies.

Lockheed Martin builds air force fighter jets, missiles, and satellite systems.

The DTEC ETF did not pay a distribution in its first year of trading.

The annual management fee is 0.5%.

Betashares Global Defence ETF (ASX: ARMR)

The ARMR ETF is $25.90 per unit, up 1.3% today.

Since inception on 2 October last year, this ASX ETF has delivered an average annual total return of 77%.

ASX ARMR invests in 52 companies headquartered in NATO nations or allied countries, and tracks the VettaFi Global Defence Leaders Index before fees.

Currently, the top five holdings are Palantir, Raytheon Technologies Corp, Safran SA, General Dynamics Corp, and Lockheed Martin Corp,

Raytheon Technologies manufactures missiles, radar systems, and aerospace technology.

Safran builds aircraft engines and defence navigation systems.

General Dynamics builds submarines, combat vehicles, and provides defence IT services.

The ARMR ETF pays one dividend per year.

ARMR ETF paid its first dividend of 53.546615 cents per unit in July.

The yearly management fee is 0.55%.

The post 3 ASX ETFs exposed to the global defence megatrend appeared first on The Motley Fool Australia.

The ASX 200 is up around 9.7% over the past 12 months. That's almost perfectly in line with the long-term average annual return of roughly 9.3%.

Of course, markets never move in straight lines. Some years surge ahead, others pull back, and over time, it all averages out. So rather than trying to predict where the ASX 200 will end up next year, I prefer to look for areas of the market where powerful tailwinds could create a little extra lift.

Two sectors currently stand out: defence and small caps.

The global re-arming cycle

Defence spending is rising across the world, and not just because of ongoing conflicts or geopolitical tensions. Nations are also modernising their military technology, replacing ageing fleets of aircraft, vehicles, and equipment in what is effectively a decades-long upgrade cycle. 

NATO members recently agreed to increase collective defence spending to 5% of GDP by 2035, a significant step up from the long-standing 2% benchmark set in 2014.

Closer to home, Australia unveiled an additional $50.3 billion investment in the Australian Defence Force earlier this year as part of its new long-term strategy.

And in Asia, Japan's incoming Prime Minister Sanae Takaichi has fast-tracked the nation's goal of reaching 2% of GDP in defence spending, bringing the target forward by two years to 2026.

This means trillions of dollars will continue flowing to companies that design and supply advanced defence systems — from drones and radar to AI-enhanced surveillance and electronic countermeasures — over the coming decade.

On the ASX, DroneShield Ltd (ASX: DRO) and Electro Optic Systems Holdings Ltd (ASX: EOS) have already demonstrated the sector's potential. Their share prices have jumped as swelling global defence budgets translate directly into rising orders, stronger revenues, and renewed investor confidence.

However, defence is not just a local story. Investors seeking diversified exposure might consider ETFs such as the VanEck Global Defence ETF (ASX: DFND) or the Betashares Global Defence ETF (ASX: ARMR). These provide access to global giants like Lockheed Martin, BAE Systems, and RTX Corp — companies building the next generation of defence hardware and software.

The long-term trend looks powerful. Even so, valuation risks are worth keeping in mind after such sharp rallies. A diversified approach could be a safer way to participate in the global re-arming cycle.

Growth and recovery potential

At the opposite end of the market, smaller companies could also shine in 2026.

The S&P/ASX Small Ordinaries Index (ASX: XSO) has surged nearly 22% this year, outpacing the ASX 200's 9.7% gain. That's a sharp turnaround after years of underperformance.

Why the rebound?

Smaller businesses tend to respond faster to improving conditions, and with the Reserve Bank expected to ease rates in 2026, lower borrowing costs could provide a strong tailwind. Many small caps are also trading at more attractive valuations compared to large, fully-priced blue chips.

For investors who prefer a diversified approach, the VanEck MSCI International Small Companies Quality ETF (ASX: QSML) focuses on 150 of the world's highest-quality small businesses. These companies are screened for high returns on equity, stable earnings, and low financial leverage, the kind of financial discipline that has historically led to long-term positive performance.

Foolish Takeaway

There's no guaranteed way to beat the market. Even the most talented investors experience stretches where they don't outperform the ASX 200's average return.

Still, identifying structural trends — like defence modernisation or small-cap recovery — can help investors build a satellite portfolio around a diversified core.

Whether through individual shares or ETFs, these two areas offer fascinating potential for those willing to think a little beyond the benchmark. Just remember: outperformance is possible — it's just never easy.

The post 2 sectors I think could outperform the ASX 200 in 2026 appeared first on The Motley Fool Australia.

Let's check them out.

Video Games and Esports ETF (ASX: GAME)

The GAME ETF is trading at $20.38 per unit, up 0.89% on Tuesday and up 80% over the past 12 months.

As you might have guessed, GAME ETF is leveraging the worldwide video gaming craze to deliver outstanding returns for investors.

The GAME ETF is invested in 37 shares and tracks the Nasdaq CTA Global Video Games & Esports Index.

The bulk of its investments are in interactive home entertainment devices and facilities, with seven in 10 dollars allocated here.

Other major allocations are application software (15% of funds) and interactive media and services (8% of funds).

The US is the biggest geographic exposure at 40%, followed by Japan at 31%, China at 19%, and South Korea at 6%.

The GAME ETF pays dividends (called 'distributions') once a year.

The management fee is 0.57% per annum.

Since GAME's inception in February 2022, this ASX ETF has produced an average total annual return of 17%.

Vaneck Global Defence ETF (ASX: DFND)

The DFND ETF is $39.17 per unit, down 0.03% today and up 83% over the past 12 months.

VanEck launched the DFND ETF in September last year amid a significant rise in global defence spending.

US President Donald Trump has been pressuring nations around the world, including Australia, to bump up military investment amid ongoing aggression from Russia in Ukraine, and China's increased assertiveness and ambitions to reclaim Taiwan as part of its empire.

Research shows global defence spending totalled US$2.46 trillion last year compared to US$2 trillion in 2022.

Back in June, the 32 nations of NATO got together and agreed to President Trump's request to increase defence spending to 5% of gross domestic production over the next 10 years. That's a massive increase from the 2% of GDP that NATO is spending now.

This ASX ETF holds 32 shares and tracks the MarketVector Global Defence Industry (AUD) Index.

More than 70% of funds are invested in aerospace and defence systems. Other major allocations are professional services at 15%, software at 8%, and machinery at 5%.

The US dominates the geographic exposure with almost one in every two dollars of DFND's investment funds parked there.

Other major allocations include South Korea at 12%, France at 10%, Italy at 8%, and Sweden at 6%.

The DFND ETF pays distributions once per year.

The management fee is 0.65% per annum.

Since its inception in September 2024, this ASX ETF has delivered an average total annual return of 93%.

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