Betashares has unveiled its latest ETF offering that provides access to leading global defence companies aligned with NATO-allied countries.
The Betashares Global Defence ETF (ASX: ARMR) invests in a portfolio of up to 60 leading companies which derive over 50 per cent of their revenues from the development and manufacturing of military and defence equipment, such as Lockheed Martin, Palantir Technologies, and BAE Systems.
It will include companies headquartered in NATO member and major NATO ally countries such as Australia, South Korea, and Japan.
The ETF marks Betashares’ 96th fund to launch on the ASX.
“Due to the shifting geopolitical landscape, NATO-aligned nations are increasing spending to levels not seen since the Cold War to enhance their defences,” observed Betashares chief executive Alex Vynokur.
“This underpins strong projected growth in revenue and cash flows for many companies in the ARMR portfolio.
“Moreover, additional spending on defence has historically been supportive of innovative technological developments with commercial applications.”
The fund manager highlighted the significant rise in global spending in response to the growing complexity of modern threats and technological advancements, with every region in the world experiencing growth in defence spending in 2023.
It also noted NATO-aligned countries are seeking to strengthen their strategic positions, with many major governments having announced greater spending plans for the future, particularly across the European continent.
“ARMR is designed as a satellite portfolio exposure, allowing investors and their financial advisers to obtain focused exposure to the defence and security industry, complementing a well-diversified portfolio of equities, bonds and other assets,” it said.
Last week, Global X announced it is bringing its Defence Tech ETF (ASX: DTEC) to Australian shores. The fund, which has been listed on the NYSE Arca since 2023, offers exposure to crucial sectors driving the future of defence including AI, drones and cyber security.
Prior to this, VanEck launched its own defence ETF (ASX: DFND) in September, which is understood to be the first defence ETF on the ASX.
At the time, the fund manager’s Asia-Pacific chief executive, Arian Neiron, observed the world has unfortunately shifted “since the days of celebrating the peace dividend”.
“Where countries used to extol the economic benefits of reduced defence spending, they’re ramping up military expenditure,” he said.
“Investors are adapting to the likely reality that this will keep rising in the years ahead.”
