This thematic ASX exchange-traded fund (ETF) has gained a lot of attention from investors amid US pressure for other nations to raise defence spending over the past several months.

Overnight, the 32 member nations of NATO committed to raising their defence spending from 2% of GDP to 5% of GDP by 2035.

That's huge.

32 NATO countries commit to ramping up defence spending

To get some understanding of the scale of this increase in defence spending, let's look at Germany.

Before the NATO Summit, the German Government had already proposed to raise its defence spending from 2% to 3.5% of GDP by 2029.

That's the equivalent of almost 400 billion euros (US$464 billion) in extra defence spending by just one nation within NATO.

Secretary-General Mark Rutte says NATO needs "a quantum leap" in defence spending to keep up with China and Russia's build-up.

VanEck caught on to this growing defence spending trend and launched the VanEck Global Defence ETF in September last year.

The DFND ETF provides exposure to global companies manufacturing and distributing military infrastructure, products, and services.

The ETF tracks the MarketVector Global Defence Industry (AUD) Index (before fees), which was launched in August 2024.

And wow, has it shot the lights out. The DFND ETF's unit price has risen by 70% since its inception.

This compares to a 7% lift for the S&P/ASX 200 Index (ASX: XJO) and an 11% rise for the S&P 500 Index (SP: .INX) over the same period.

What are you buying with the DFND ETF?

The ETF currently invests in 29 stocks in developed markets, with US shares accounting for 52.23% of assets.

Next is France (10.57%), Italy (8.41%), South Korea (7.98%), Sweden (6.35%), Israel (4.29%), Singapore (3.88%), the United Kingdom 3.69%), and Germany (2.38%).

The stocks represent some of the world's largest companies involved in aerospace, research, software, and electronic equipment.

Importantly, VanEck says defence companies are "typically under-represented in benchmarks".

That means you shouldn't assume you have exposure to them if you're invested in the major indices.

Here is a table of the top 10 holdings in the DFND ETF and what those companies do.

What about dividends?

In terms of dividends, the DFND ETF intends to pay a distribution annually.

At the time of writing, it has not yet paid a distribution.

There is a yearly management fee of 0.65%.

The post Here are the top stocks in the DFND ETF appeared first on The Motley Fool Australia.