Global defence spending is soaring amid continuing geopolitical tensions around the world.
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.
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More reading
- Global X announces dividends for DTEC, WIRE and other ASX ETFs
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Motley Fool contributor Bronwyn Allen has positions in Betashares Global Defence ETF – Beta Global Defence ETF and Vaneck Global Defence Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Palantir Technologies and RTX. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lockheed Martin and Rheinmetall. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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