Australian investors are turning to defence technology as a robust investment opportunity, with the Global X Defence Tech ETF (DTEC) leading the charge. In the first seven months of 2025, DTEC delivered a staggering 60% return, far outpacing the S&P/ASX 200’s 9.5% gain. This surge underscores a growing appetite for defence-related assets amid escalating global tensions and rising military budgets.
The defence sector’s appeal is evident in the performance of other ETFs. The VanEck Global Defence ETF climbed 54%, while the Betashares Global Defence ETF rose 44.8%. DTEC, in particular, has attracted significant capital, with $66 million in inflows year-to-date, including $17 million in July alone. This influx reflects investor confidence in the sector’s resilience, even in uncertain economic conditions.
A key driver of DTEC’s success is its top holding, Palantir Technologies. The US software company, specialising in big data analytics for intelligence and defence organisations, has seen its stock soar 134.3% in 2025. This surge was fuelled by a potential $10 billion contract with the US Army, highlighting the increasing demand for advanced data-driven solutions in military operations.
“Defence investing has strong appeal to investors because government spending is likely to rise, even if global economies fall into recession,” said Billy Leung, senior investment strategist at Global X. This sentiment underscores the sector’s perceived stability, as nations prioritise defence expenditure regardless of broader economic trends.
The rise of defence tech ETFs signals a broader shift in investment strategies, with investors seeking sectors that offer both growth and resilience. As governments worldwide increase spending on automation, intelligence, and cybersecurity, the defence technology sector is poised for continued expansion. This trend suggests that defence tech will remain a compelling investment avenue, particularly for those looking to hedge against economic volatility.
For investors, the message is clear: defence technology is not just a reaction to geopolitical instability but a strategic long-term play. As conflicts evolve and technology advances, the demand for cutting-edge defence solutions will only grow, making this sector a critical component of a diversified investment portfolio.