ARMR ETF Review: A Focus on Global Defence

Highlights:

• The Betashares Global Defence ETF (ASX:ARMR) has shown impressive performance since its inception.

• The ETF holds companies primarily involved in the aerospace and defence sector, with a strong focus on NATO-member and allied nations.

• ARMR’s portfolio includes leading defence firms such as Lockheed Martin and Palantir Technologies.

The Betashares Global Defence ETF (ASX:ARMR) is one of the standout ASX-listed exchange-traded funds in recent months, especially given its performance in early 2025. This ETF was launched in October of the previous year, offering investors exposure to a portfolio of global defence companies. Since its debut, ARMR has seen remarkable returns, making it a noteworthy player in the market. With a focus on firms that are heavily involved in defence and military sectors, the ETF tracks a variety of companies with significant operations in aerospace, technology, and consulting.

Composition of the ARMR ETF

The ARMR ETF invests in up to sixty companies that are pivotal in the global defence landscape. The selection process for these companies is based on two key criteria: first, they must derive at least half of their revenue from defence-related products and services; second, they must be headquartered in a country that is either a NATO member or an allied nation. This ensures that the ETF's holdings are comprised of firms that have a strategic role in global security.

The majority of ARMR’s holdings are based in the United States, representing a large portion of its exposure. In addition, the ETF includes companies from Western Europe, with a few exceptions from other regions. The fund is heavily weighted toward firms engaged in the production of military equipment, aerospace technologies, and security software, such as Lockheed Martin and Palantir Technologies. These companies are at the forefront of technological advancements in their respective sectors, making them integral to ARMR’s portfolio.

Performance Overview

Since its launch, ARMR has delivered strong performance, showing a notable return since the beginning of the year and a significant gain since its listing. While the ETF’s performance has been strong, it is important to note that the nature of its holdings ties its success closely to the geopolitical and defence landscape. The companies within the ETF are positioned in industries that are often seen as crucial for national security, which can be a factor in their consistent growth.

However, past performance should not be used as a sole indicator of future outcomes. While the ETF has demonstrated solid returns, it is important for investors to understand that the global defence sector can be influenced by factors such as government spending, international relations, and global security developments. These external factors can have a substantial impact on the profitability and stock prices of the companies that ARMR holds.

Sector and Industry Focus

The ARMR ETF provides exposure to a sector that is closely tied to global defence and security. Companies within this sector are responsible for the development and production of advanced military systems, from aircraft and missile defence systems to cybersecurity solutions. The focus on NATO member countries and allied nations ensures that the ETF’s holdings are predominantly involved in defence contracting with governments that are part of established military alliances.

This sector is typically viewed as vital for maintaining national security, and many of these companies benefit from long-term contracts with governments, which can provide a level of stability to their revenues. However, the nature of these contracts can vary, with some being subject to political and economic changes that might influence the sector’s overall performance.

Considerations for ARMR ETF

When reviewing the ARMR ETF, it is important to keep in mind that it is not designed for those interested in ethical investing, as many of the companies in its portfolio are involved in the production of military equipment and technology. The ETF's focus on the defence sector means that it may not align with certain investment philosophies that prioritize sustainability or ethical considerations.

The inclusion of companies that specialize in military technologies also means that the ETF is exposed to the inherent risks of the defence industry. Geopolitical tensions, shifts in government policy, and fluctuations in defence budgets can all influence the performance of the ETF’s holdings.

Overall, while the ARMR ETF has displayed strong performance since its launch, it is essential to understand its sector-specific focus and the factors that influence the companies it includes.