All three defence ETFs fell over the year to 30 September 2026: ARMR −11.8%, DFND −15.4% and DTEC −17.5%. ARMR and DTEC are about 74% the same, both built around US primes like Lockheed Martin and Palantir. DFND is the different one: only 54% US, with more Europe and South Korea. DTEC is cheapest at 0.50%, DFND dearest at 0.65%.
Why defence ETFs exist
Governments across Europe, Asia and the US have been lifting defence budgets, and listed weapons, aerospace and military technology companies rallied strongly through 2023 and 2024. Australian investors had no simple way to own them, so three issuers launched funds within 27 days of each other:
- DFND, VanEck Global Defence, listed 12 September 2024.
- ARMR, Betashares Global Defence, listed 4 October 2024.
- DTEC, Global X Defence Tech, listed 9 October 2024.
Because they launched together, their track records line up neatly. They are also small: about $571 million between them, with almost no new money going in during September. None has a three-year record yet.
The numbers side by side
DFND vs ARMR vs DTEC at a glance
| DFND | ARMR | DTEC | |
|---|---|---|---|
| Issuer | VanEck | Betashares | Global X |
| Fee (MER) | 0.65% | 0.55% | 0.50% |
| Fund size | $242m | $217m | $112m |
| 1-month return | −5.2% | −5.8% | −6.9% |
| 1-year return | −15.4% | −11.8% | −17.5% |
| $10,000 a year ago is now | $8,458 | $8,815 | $8,253 |
| Biggest holding | Palantir 8.8% | Lockheed Martin 9.7% | Palantir 11.5% |
| Listed | Sep 2024 | Oct 2024 | Oct 2024 |
Total returns to 30 September 2026. Source: TMX Australia monthly funds report; holdings from issuers.
For context, the broad global shares fund VGS returned +10.1% over the same 12 months. A defence ETF held over that year cost investors more than 20 percentage points against simply owning the world market. That is what thematic risk looks like: a theme can be right in the long run and still have a poor year after a strong run.
What each fund actually owns
- DFND is the most international. Its top holdings mix Palantir and RTX with Thales (France), Saab (Sweden), Elbit (Israel), Leonardo (Italy), Hanwha Aerospace (South Korea) and Kongsberg (Norway). It is the only one with a meaningful Korean slice, about 8%.
- ARMR leans to the traditional US and European prime contractors: Lockheed Martin, General Dynamics, RTX, Northrop Grumman, BAE Systems, Safran and Rheinmetall. It is the broadest, with about 60 holdings.
- DTEC is marketed as defence technology, but in practice its top five are Palantir, Lockheed, RTX, General Dynamics and Northrop, similar to ARMR. It has the biggest Palantir position, at 11.5%.
Country mix of each defence ETF
The industry mix is narrow in every case: 80 to 89% industrials (aerospace and defence makers) and 10 to 13% technology, mostly Palantir. You are buying one industry, with a handful of companies making up close to half of each fund.
How much do they overlap?
How much of each pair is the same
ARMR and DTEC are close cousins, so holding both adds little. DFND and either of the others overlap by only about 43%, because of DFND's heavier European and Asian weighting. And the defence funds overlap with VGS by less than 1%: defence companies are a tiny slice of the world index, so a defence ETF is genuinely a separate bet.
Compare them directly: DFND vs ARMR and ARMR vs DTEC, or run all three through the overlap calculator.
Fees matter more in a small theme
What fees cost on $100,000 over 20 years
Thematic funds cost three to four times a broad global index fund. The gap between DTEC and DFND, 0.15% a year, is $150 a year on $100,000. Over the past year the portfolio differences mattered far more than the fees, but over a decade the fee is the one thing you know in advance.
Risks worth weighing
- Concentration. The top ten holdings make up most of each fund. One contract loss or profit warning at Lockheed or Palantir moves the whole ETF.
- Policy and politics. Defence spending depends on budgets, elections and peace talks. Share prices can fall on good news about the world.
- Valuation after a run. The funds launched after a big rally in defence shares. The past year shows how quickly that can unwind.
- Currency. All three are unhedged. A rising Australian dollar, as in the past year, trims returns. Our hedged vs unhedged guide explains why.
- Ethics. Weapons makers are excluded by most ethical funds. If that matters to you, see our ethical ETFs list.
Where a defence ETF fits
For most portfolios, defence is a satellite: a small position, often 2 to 5% of the total, held alongside a broad core of Australian and global shares. It suits investors who believe higher defence spending will persist and who can sit through falls like the past year's.
- ARMR suits those who want the broadest list of established US and European contractors.
- DTEC suits those who want the lowest fee and the biggest Palantir position.
- DFND suits those who want the least US-heavy mix, with more Europe and Korea.
Defence often turns up inside wider AI and technology themes too. See how it fits with chips, copper and uranium in the AI boom goes beyond NDQ, how every theme ranked in every theme ETF on the ASX, or browse the defence ETFs page.
Common questions
Which defence ETF is best in Australia?
Over the year to 30 September 2026, ARMR lost least (−11.8%), ahead of DFND (−15.4%) and DTEC (−17.5%). DTEC is cheapest at 0.50%. DFND is the most international. None has a long enough record to call a clear winner.
What is the difference between DFND and ARMR?
They are only about 43% the same. ARMR is about 64% US and led by Lockheed Martin and General Dynamics. DFND is about 54% US, with more Europe and South Korea, such as Thales, Saab and Hanwha Aerospace. ARMR charges 0.55%, DFND 0.65%.
Why did defence ETFs fall?
The data shows the falls, not the reasons. Defence shares had rallied strongly before these funds launched, and a theme that has run hard can fall back even when the long-term story is intact. A rising Australian dollar also trimmed returns, as all three are unhedged.
Are defence ETFs ethical?
They hold weapons and military technology makers, which most ethical and ESG funds exclude. Whether that fits your values is a personal decision.
Joshua Stega is a financial adviser with 20 years' experience and the founder of ETF Adviser. He built ReviewETF to make every Australian ETF easy to find and compare.
General information only. It does not take into account your objectives, financial situation or needs. Consider the PDS and TMD before investing. Past performance is not a reliable indicator of future performance. Data as at 30 September 2026.