In a world marked by geopolitical instability, national security is now top of mind for governments across the globe — and defence budgets are surging in response. Australia is leading the charge in the Indo-Pacific region, with projected defence spending to hit $100 billion by 2033–2034, up from $37 billion in 2022–2023 (Source:
defence.gov.au). Even former U.S. President Donald Trump recently urged Australia to boost defence investment, reinforcing global calls for greater military readiness. Source: The Australian.
In this environment, investors are turning their attention to the VanEck Global Defence ETF (ASX: DFND), a standout performer in the sector. Since September 2024, DFND has soared
71.2%*, reflecting strong investor demand for exposure to the global defence value chain.
Why DFND?
DFND provides access to a diversified portfolio of companies in aerospace, cybersecurity, and advanced military technologies. It tracks the Market Vector Global Defence Industry Index and avoids exposure to controversial weapons manufacturers and companies breaching international ethical standards.
Top holdings include:
- Palantir Technologies (11.19%)**
- Leidos Holdings (7.84%)**
- Booz Allen Hamilton (7.64%)**
Unlike traditional defence ETFs, DFND focuses on companies supplying cutting-edge systems and intelligence — rather than the large contractors like Lockheed Martin or Raytheon.
The Big Picture:
- Global defence spending rose 7% in 2023 to US$2.43 trillion — the sharpest increase since 2009. (Source: sipri.org)
- Forecasts suggest this could hit US$3.1 trillion by 2030. (Source: sipri.org)
- NATO nations are increasing commitments, with 23 countries expected to meet or exceed the 2% GDP target by 2024. Source: nato.int – Defence Expenditure Report 2024.
The Investment Case:
Defence spending is resilient — often increasing during economic downturns — and government contracts in this space typically provide long-term revenue stability for companies.
At HALO, we also offer a Defence & Aerospace Thematic Portfolio, comprising ten high-performing companies exposed to this megatrend. Over the past year, the portfolio returned 51.87%**.
Now is the time to position your portfolio at the forefront of this growing sector. We rate DFND a BUY.
Want to learn more? Book a demo or call us to access DFND and our Defense & Aerospace Portfolio.
*Source: HALO Technologies - VanEck Global Defence ETF. Performance Period September 2024 to 10 June 2025)
**Source: HALO Technologies, performance period 10 June 2024 to 10 June 2025.
Risks
Please remember that, while opportunities like these can offer strong potential returns, they also carry certain risks. Some of the key risks to consider include:
Volatility Risk: Share prices can fluctuate significantly in the short term.
Timing Risk: Entering or exiting the market at the wrong time can impact returns.
Legislative Risk: Changes in government policy or regulation may affect the investment.
Currency Risk: For international exposures, exchange rate movements can influence outcomes.
Capital Loss: As with any investment, there’s a possibility you may not recover your full capital.
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