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Highlights:
The VanEck Global Defence ETF (ASX:DFND) has outperformed broader market trends, achieving significant gains in 2025.
The ETF invests in top global defence and aerospace companies, with a focus on international stocks.
Rising global defence spending and geopolitical concerns contribute to the ETF's impressive growth.
Thematic exchange-traded funds (ETFs) have become increasingly popular, allowing investors to gain exposure to specific sectors that align with global trends. Among these, the VanEck Global Defence ETF (ASX:DFND) stands out as one of the strongest performers in 2025. This fund focuses on companies involved in the defence and aerospace industries, both of which have seen heightened demand in recent years.
As global tensions rise and defence spending increases, funds like DFND are positioned to capture the benefits of this expanding sector. The ETF holds a diversified portfolio, including companies from several international markets, contributing to its resilience and growth.
Defence Sector Drives ETF Performance
The VanEck Global Defence ETF, which began 2025 at a modest unit price, has quickly gained value, reflecting the strong performance of the underlying companies within its portfolio. The fund includes a range of major defence and aerospace companies based in multiple regions, with a significant portion of its holdings in the United States.
Top holdings in the fund include well-known companies such as Palantir Technologies, Thales, and Korea Aerospace Industries. These companies have all seen remarkable growth this year, with some significantly outperforming market averages. As geopolitical concerns and global instability push demand for defence solutions, these companies are well-positioned to benefit.
Global Exposure and Diverse Holdings
One of the key features of the VanEck Global Defence ETF is its international exposure. The fund includes shares from companies based in countries such as France, Israel, South Korea, and Singapore, in addition to a dominant allocation in US-based companies. This diverse geographic mix helps the ETF mitigate risks tied to any single country's market conditions.
The ETF holds a mix of established defence contractors and newer players in the space, offering a blend of stability and growth potential. For instance, companies like Palantir Technologies have demonstrated significant growth in recent years, with the technology and aerospace sectors drawing heightened attention due to global security concerns.
Thematic Focus and Performance of ASX Stocks in Defence
As defence spending continues to rise, thematic ETFs like the VanEck Global Defence ETF (ASX:DFND) are capturing the attention of those looking to capitalise on the global push for increased military and technological capabilities. This aligns with the broader trend of growing interest in sectors such as defence, technology, and aerospace, all of which are integral to national security agendas around the world.
Within the ASX stocks space, funds like DFND offer exposure to key players in this sector, highlighting how thematic ETFs can tap into powerful global trends. By tracking leading companies in the defence industry, DFND has managed to significantly outperform the broader ASX market, which has experienced setbacks this year.
The increase in defence-related stock prices, driven by heightened global military spending and ongoing geopolitical tensions, has been a key factor in DFND’s strong performance. This fund is particularly noteworthy in the context of ASX-listed ETFs, which provide a convenient way for investors to access high-growth sectors without directly purchasing individual stocks.
Defence Sector Continues to Capture Attention
The surge in demand for defence-related products and services has been a major factor behind the rise of the VanEck Global Defence ETF in 2025. Investors have increasingly sought exposure to industries that are benefitting from this trend, including companies in the aerospace, defence, and security sectors. As geopolitical issues continue to evolve, the demand for military and technological advancements is likely to remain high, which could provide ongoing support for the performance of funds like DFND.
This growing interest in the defence sector further highlights the importance of considering thematic ETFs as a way to gain targeted exposure to key global trends. With their strong track record and diversified portfolios, ETFs like DFND are showing the resilience of the defence sector amid broader market challenges.
