Australian investors are increasingly investing in defence, with the Global X Defence Tech ETF (DTEC) emerging as one of the top-performing exchange-traded funds (ETFs) in the first seven months of 2025. The ETF has yielded returns of almost 60 per cent, driven by rising global defence expenditure. This performance significantly surpassed the S&P/ASX 200, which saw an increase of 9.5 per cent during the same timeframe. Other defence funds have similarly benefitted, including the VanEck Global Defence ETF, which climbed 54 per cent, and the Betashares Global Defence ETF, up 44.8 per cent.
DTEC has attracted $66 million in inflows year-to-date, with $17 million coming in during July alone. The fund’s top holding is Palantir Technologies, a US software company specialising in data analytics. Palantir’s stock has surged 134.3 per cent in 2025, boosted by a recent US Army contract potentially worth up to US$10 billion. Palantir Technologies builds and deploys software platforms for intelligence agencies, defence organisations and commercial entities. The company focuses on big data analytics.
According to Global X senior investment strategist Billy Leung, increasing government expenditure on automation, intelligence, and cybersecurity is fuelling the demand for defence technology. He said, “Defence investing has strong appeal to investors because government spending is likely to rise, even if global economies fall into recession.” This suggests a perceived resilience in defence spending, even during economic downturns, making it an attractive sector for investors seeking stability and growth.
