Exchange-traded fund (ETF) performance data shows that defence and gold miner ETFs led the pack in the first half of 2025, driven by an unusual macro and geopolitical backdrop.
The Global X Defence Tech ETF delivered a 51.74 per cent return year-to-date, according to figures from both Global X and Betashares.
Interest in defence – which has surged since Donald Trump returned to office in the US – now accounts for more than half of all thematic ETF flows listed in Australia.
Global X data shows defence ETFs have attracted $253 million in net flows so far this year, while globally, the category has drawn more than $20 billion – a sign of growing investor appetite for the sector.
“As NATO formalises its 5 per cent defence spending of GDP target and member nations begin implementation, we expect increased visibility and capital flows into the sector, driving continued revenue and earnings growth and potential multiple expansion,” Global X said.
“The market has taken notice with defence-related companies having a strong start to the year, led by the likes of Rheinmetall and Palantir Technologies. As a result, the defence sector has emerged as one of the best-performing segments in the market so far in 2025.”
Coming in second on the ladder of top-performing ETFs year-to-date was the Betashares Global Gold Miners Currency Hedged ETF, which climbed 48.43 per cent, as the precious metal surged on safe-haven demand amid US tariffs and escalating conflict in the Middle East.
More broadly, the Australian ETF industry ended the financial year at another record high – $280 billion in total assets under management – up 97 per cent compared with the same period last year.
Betashares now says the $300 billion milestone is firmly in sight. Global X added that with ETF flow activity typically picking up in the second half, the industry looks on track to reach $40–50 billion in net flows by year-end – easily outpacing the $31 billion record set in 2024.
“Looking ahead, ETF growth is expected to continue, driven by the ongoing shift from high-cost funds to low-cost strategies, greater adviser adoption as ETFs become integral to portfolio construction, expanding product innovation, and the rapid rise of digital platforms that make investing easier and more accessible for all types of investors,” Global X said.
“Together, these factors set the stage for sustained ETF market expansion for many years to come.”
Looking at June data alone, Global X said the month saw standout gains across key commodities and select equity markets, with platinum leading the rally, surging 23.7 per cent on deepening supply deficits and a shift in jewellery demand from gold to platinum in China.
Moreover, the ETF provider said palladium also rose 15.5 per cent, supported by tight supply and growing investor interest, while uranium prices jumped following the Sprott Physical Uranium Trust’s plan to buy 2.6 million pounds, while policy momentum built as the Asian Development Bank reviewed its nuclear financing ban.
These gains saw the Global X Uranium ETF return18.8 per cent in June to become the best-performing ETF of the month – outperforming the Betashares Global Uranium ETF, which returned 16 per cent. The Global X Physical Palladium Structured ETF also posted a strong result, gaining 15.5 per cent for the month.
Among the worst-performing ETFs in June were inverse and cryptocurrency-related strategies, reflecting broad market strength and continued risk-on sentiment. The Global X Ultra Short Nasdaq 100 ETF led the laggards with a 12.9 per cent decline, followed by the Betashares US Equities Strong Bear ETF (BBUS), which fell 10.9 per cent as US sharemarkets rallied on rate cut optimism, easing geopolitical tensions, and AI-driven momentum.
Ethereum ETFs also struggled – the Global X 21Shares Ethereum ETF dropped 7.8 per cent, while the Monochrome Ethereum ETF declined 7.5 per cent – weighed down by bearish technicals, a US$237 million whale sell-off and waning NFT activity.
Regarding flows by category, Betashares and Global X agreed that in June, investor demand remained concentrated in broad-based global and Australian equity ETFs after receiving $8 billion and $6.2 billion in net flows, respectively, with fixed income receiving a very strong $4.4 billion also.
