In fact, they make up nine out of the top 10 performing exchange-traded funds (ETF), with Global X’s latest market monitor showing six gold or gold miner ETFs and three defence-focused funds leading the pack in 2025. The Global X Defence Tech ETF has brought in a whopping 46 per cent return so far this year.
With year to date returns ranging from 20 per cent to 46 per cent for some of the biggest names providing exposure to gold and defence locally, VanEck’s APAC CEO Arian Neiron said the two thematics are blowing others out of the water.
“Zooming out to the year to date performance for ETFs in Australia, it is clear that it is a two-asset race,” Neiron told InvestorDaily.
According to him, global defence ETFs managed to double their net flows between April and May, totalling $50.2 million last month.
“The spike is likely attributable to the rally in European defence stocks, which have been benefited from a significant increase in defence spending by NATO member countries.”
It comes amid indications that NATO may announce an increase in the minimum defence spending requirement at the upcoming NATO Summit in The Hague, with early reports suggesting the current 2 per cent minimum could be raised as high as 5 per cent.
With nearly a third of VanEck’s Global Defence ETF portfolio allocated to European defence companies in particular, it’s good news.
“March 2025 continues to hold the record for the highest inflows to global defence ETFs, triggered by the EU’s announcement that it would increase defence spending by US$867 billion,” Neiron continued.
“While flows softened somewhat in April, we think this was more a reflection of the broader market rout than any changes to demand.”
Meanwhile, gold continues to benefit from elevated global risks and geopolitical tensions. While down from its mid-April record highs, financial giants like Citi agree that demand for the yellow metal is “firing on all cylinders”.
In fact, some 0.5 per cent of world gross domestic product is currently spent on gold, the highest in Citi’s half-century of data collection.
“With long-dated US Treasuries falling out of favour, investors have increasingly turned to dynamic hedging strategies, and the thoughtful inclusion of hard assets like gold as a reserve diversifier have become important tools in navigating a less predictable US dollar liquidity environment,” Neiron added.
“The ABS data published yesterday on Australia’s account balance was telling: Australia exported $11 billion in ‘non-monetary gold’ to the US over the March quarter, which is more than the gold we exported to the US in total over the preceding four years.”
Betashares last month similarly highlighted growing investor appetite for the yellow metal, with its gold ETF having surpassed $1 billion in funds under management in May.
“Gold has been the ultimate Trump hedge for investors holding equities since the US election, rallying when policy shocks have rocked markets and providing strong returns in an absolute sense,” Betashares senior investment strategist Cameron Gleeson told InvestorDaily last month.
“While gold traditionally does well in periods of uncertainty, it has been supported by ongoing structural demand from central banks turning to gold as a store of value for a number of years.”
