Defence & Aerospace ETFs on the ASX 2026: DFND, ARMR, DTEC Compared

In late 2024, three Australian ETF issuers launched defence-focused funds within four weeks of each other:

• DFND (VanEck) listed 12 September 2024

• ARMR (Betashares) listed 4 October 2024

• DTEC (Global X) listed 9 October 2024

The timing wasn't coincidence. Rheinmetall had tripled. Lockheed Martin was breaking out. NATO countries were lifting defence spending toward 2-3% of GDP. By the time these ETFs hit the ASX, the global defence stock rally was already a year old — and Australian investors had no way to access it through a single trade.

Eighteen months in, the three funds have collected $665M between them as at May 2026 (ReviewETF Defence ETFs page). They look similar from the outside — global defence, equity exposure, fees between 0.50% and 0.65% — but under the hood they hold meaningfully different portfolios.

This guide breaks down what each fund actually owns, which one delivered the best 1-year return, and which structure makes sense for which investor.

At a glance

The headline differences:

• DTEC is the cheapest (0.50% p.a.) but the smallest by AUM

• ARMR has delivered the highest 1-year return at +11.51% to May 2026

• DFND is the largest by AUM ($288M) and the most geographically diversified

• All three launched within 27 days of each other — so 1Y return comparisons are clean

You can put any two of these side-by-side using the Compare ETFs tool.

DFND — VanEck Global Defence ETF

DFND tracks the MarketVector Global Defence Industry (AUD) Index — a portfolio of global companies generating significant revenue from defence and aerospace. It has the highest MER of the three at 0.65% p.a. but also the largest AUM at $288.06 million as at May 2026.

The story DFND tells: Europe and Korea matter.

DFND's top holdings at May 2026:

• RTX Corp 7.95%

• Thales (France) 7.64%

• Leonardo (Italy) 6.87%

• Hanwha Aerospace (South Korea) 6.61%

• Saab (Sweden) 6.51%

• Leidos 5.27%

• Curtiss-Wright 5.17%

• Palantir 5.06%

• Elbit Systems (Israel) 4.83%

• Karman Holdings 3.41%

Five of the top six holdings are non-US. That's by design — MarketVector's index methodology caps US weighting around 50% and forces meaningful exposure to European primes (Thales, Leonardo, Saab) and emerging Asian defence majors (Hanwha, Korea Aerospace). It's the only one of the three with double-digit South Korean exposure.

What DFND delivered: +9.93% over one year to May 2026. Solid but the lowest of the three — partly because European defence stocks haven't matched US momentum, partly because the higher fee compounds against you.

Who DFND suits: Investors who think US defence valuations are stretched, or who want exposure to the European NATO rearmament theme that's driving Rheinmetall, BAE and Saab.

ARMR — Betashares Global Defence ETF

ARMR tracks the VettaFi Global Defence Leaders Index — companies that derive 50%+ of revenue from defence, headquartered in NATO-aligned countries. AUM is $246.53 million as at May 2026 with a 0.55% p.a. MER.

The story ARMR tells: hold the big primes, plus the disruptors.

ARMR's top holdings at May 2026:

• Safran (France) 9.0%

• RTX Corp 8.3%

• General Dynamics 8.0%

• Lockheed Martin 7.9%

• Palantir 7.7%

• Northrop Grumman 6.3%

• BAE Systems (UK) 6.1%

• Rheinmetall (Germany) 5.3%

• Rocket Lab 5.2%

• L3Harris 4.6%

Two things stand out. First, ARMR holds all the top global primes — Lockheed, RTX, Northrop, General Dynamics, BAE, Rheinmetall — plus the European leaders (Safran, BAE) at meaningful weights. Second, it has explicit allocations to defence-tech disruptors like Palantir (7.7%) and Rocket Lab (5.2%) that the other two either underweight or hold differently.

The country split runs US 62% / France 11% / UK 7% / Germany 7% / South Korea 4% — more US-tilted than DFND but with proper European exposure. Betashares also added Hyundai Rotem, Karman Holdings and DroneShield in a 2025 rebalance, broadening into Korean armour, missile systems and counter-drone tech.

What ARMR delivered: +11.51% over one year to May 2026 — the best of the three by a clear margin — and a strong +5.82% in just the last month, which is when European defence stocks rallied hard.

Who ARMR suits: Investors who want the cleanest blend of global primes plus exposure to defence-tech disruptors, and don't mind paying a small fee premium over DTEC for the broader portfolio.

DTEC — Global X Defence Tech ETF

DTEC tracks the Global X Defense Tech Index with a deliberate tech tilt. It's the cheapest of the three at 0.50% p.a. and the smallest by AUM at $130.60 million as at May 2026.

The story DTEC tells: defence is becoming software.

DTEC's top holdings at May 2026:

• Palantir 9.72%

• Rheinmetall (Germany) 9.23%

• RTX 7.44%

• BAE Systems (UK) 7.34%

• Lockheed Martin 7.11%

• Northrop Grumman 6.91%

• General Dynamics 4.76%

• Leidos 4.60%

• L3Harris 4.50%

• Leonardo (Italy) 4.49%

Palantir at 9.7% is the standout — DTEC's largest holding is a software company, not a tank or missile maker. That's the explicit thesis: defence spending is increasingly going to AI-enabled analytics, autonomous systems, cyber, and sensor networks. The index leans deliberately into that.

Country exposure is the most US-heavy of the three at ~70% US, with Germany (9%), UK (8%), France (5%) and South Korea making up most of the rest.

What DTEC delivered: +7.99% over one year to May 2026 — the lowest of the three despite the cheapest fee. That's not unusual for sector-specific indices that haven't yet hit their thesis runway: defence-tech is a multi-year theme, but in the last 12 months, the primes outperformed the disruptors (Rheinmetall and Lockheed beat Palantir's volatility).

Who DTEC suits: Investors who believe defence-tech (Palantir, autonomous systems, cyber, AI) will outperform traditional primes over the next decade and want the cheapest fee structure to express that view.

Geographic exposure — the biggest differentiator

This is where the three funds actually diverge.

• DFND has the broadest international tilt, especially Korea, Sweden and Israel

• ARMR balances US with proper European weight (France, UK, Germany)

• DTEC is the US-and-tech bet

If you already hold an S&P 500 or global ETF like IVV or VGS, you may already have meaningful US defence exposure baked in through RTX, Lockheed and Palantir. In that case, DFND adds more genuine diversification — Hanwha, Saab, Thales and Leonardo aren't in any standard global index in meaningful size.

Fees vs returns — the cheapest didn't win

A common assumption in ETF investing is that lower fees compound to better long-run returns. Over the first 12 months of these three funds, that assumption failed:

• DTEC (cheapest at 0.50%) returned +7.99%

• ARMR (middle at 0.55%) returned +11.51%

• DFND (most expensive at 0.65%) returned +9.93%

A 15bp fee gap (DTEC vs DFND) compounds to roughly $150 a year per $100K invested. The 2 percentage point return gap between DFND and DTEC over the past year was a $2,000 per $100K difference — 13x the annual fee saving.

That doesn't mean fees stop mattering. Over 20 years, the 15bp gap compounds to a few thousand dollars per $100K. But in a sector-specific ETF, what's inside the index matters far more than what the wrapper costs. The bigger question is whether you want US-tech-heavy (DTEC), balanced primes plus disruptors (ARMR), or international-diversified (DFND).

Which one should you buy?

There's no single right answer — but here's a framework:

Buy ARMR if you want the cleanest "all the global primes plus disruptors like Palantir" exposure. It's also the one that delivered the best return over the first 12 months.

Buy DFND if you already have significant US large-cap exposure through IVV, VGS or NDQ and want defence allocation that genuinely diversifies your portfolio internationally — especially into Korea and continental Europe.

Buy DTEC if you have a strong view that defence-tech (software, AI, autonomous systems) will outperform traditional defence primes over the next decade, and you want the cheapest expression of that view.

Don't buy any of them if you can't articulate why you want defence exposure in the first place. These are thematic, single-sector funds — not core portfolio holdings. They should sit as a satellite position, not a core, alongside diversified ETFs like VGS, IVV or A200.

The bigger picture: thematic ETF caveats

Defence ETFs are part of a broader thematic ETF wave on the ASX — single-theme funds covering AI, cybersecurity, semiconductors, uranium, copper, hydrogen, defence and space. We covered the full universe in our every-theme ETF guide ranked by performance, fees and the ones worth holding.

Three things to keep in mind with any thematic ETF:

1. Most thematic ETFs are launched after the theme has already moved. Defence ETFs landed in Q4 2024 — by then Rheinmetall had already 5x'd. That doesn't mean it's too late, but the easy money was made before retail could access it through an ASX wrapper.

2. Concentration cuts both ways. These funds hold 35-60 stocks, all in one industry. When the theme is in favour, returns can be sharp. When sentiment turns — peace deal, defence budget cuts, sector rotation — drawdowns can be brutal.

3. Position sizing matters more than fund selection. Whether you choose DFND, ARMR or DTEC matters less than how much of your overall portfolio you allocate to defence. A 5% satellite position in any of the three is reasonable for a believer in the multi-decade rearmament thesis.

The bottom line

All three ETFs give you access to the global defence and aerospace theme that wasn't easily reachable from the ASX before late 2024. None of them are obviously the wrong choice. They're built around three different philosophies:

• DFND — "the world isn't just America"

• ARMR — "all the primes, plus the new players"

• DTEC — "the future of defence is software"

Eighteen months of data doesn't settle which philosophy wins. The fact that ARMR led on 1-year returns reflects the recent rally in European defence and the addition of Palantir at scale — both could reverse next year. What it does tell you is that all three are legitimate vehicles, well-constructed, and tracking what they say they track.

Use the Compare ETFs tool to look at any two side by side, or browse the full defence ETF category page for the latest data.

More guides on themed and sector ETFs:

• Every Theme ETF on the ASX — Performance, Fees and the Ones Worth Holding

• The AI Boom Goes Beyond NDQ — Every ASX ETF Riding the Theme

• Commodity & Resource ETFs on the ASX

• Hedged vs Unhedged ETFs — The Best Option in Every Category

• The Top 5 ETF Issuers on the ASX