Defence Tech ETF (DTEC) — Review & Analysis

DTEC is the cheapest defence ETF on the ASX at 0.50% p.a., undercutting both DFND (0.65%) and ARMR (0.55%) on fees. AUM is $142.48 million as at May 2026, the smallest of the three but still meaningful for a fund that listed on 9 October 2024. The differentiator is in the name — DTEC explicitly tilts toward defence technology rather than just defence platforms, capturing AI, drones, cybersecurity, advanced electronics and intelligence software inside the broader defence universe. Compare DTEC across the full defence cohort on our defence and aerospace ETF page.

Looking at the actual portfolio, DTEC's "tech" tilt is more about composition and weighting than holdings exclusivity. The top 10 looks broadly similar to ARMR — Lockheed (9.37%), RTX (7.96%), General Dynamics (7.06%), Northrop (4.98%) — but Palantir Technologies sits at 6.22%, the third-largest position. That's a meaningfully higher Palantir weight than ARMR (5.6%) or DFND (5.06%) carry. The fund's portfolio is 86% Aerospace & Defence but with 6.76% Software and 5.94% Professional Services exposure layered on top.

The investment thesis for DTEC differs from the traditional defence primes story. Where ARMR captures the rising procurement budget thesis through major contractors building tanks, jets and missiles, DTEC adds emphasis on the technology layer of modern defence: AI-driven battle management (Palantir's strength), autonomous and unmanned systems, cybersecurity in critical infrastructure, and electronic warfare. This is the part of defence spending that is growing fastest in percentage terms even when overall budgets plateau, because military doctrine has shifted toward software-defined warfare.

DTEC carries some overlap with broader technology ETFs through holdings like Palantir, which means it doesn't behave as a "pure defence" hedge against equity risk. If you already hold technology-heavy global ETFs, the marginal Palantir exposure adds rather than diversifies. For investors specifically wanting the AI-meets-defence thesis, our AI boom beyond NDQ guide covers how DTEC connects to the broader AI infrastructure story.