Defence and Aerospace ETFs Surge in 2024–2025

Global defence spending has jumped in recent years, driven by wars and renewed NATO commitments. SIPRI reports world military budgets hit a record $2,718 billion in 2024 (up 9.4% from 2023). Europe (including Russia) saw a 17% rise to $693 billion, with Germany’s budget up 28% to $88.5 billion. EU member states together spent about €326 billion in 2024 (~1.9% of GDP) (a 30% jump since 2021), and 18 of 32 NATO countries now exceed the 2% GDP guideline (vs. 11 in 2023). These fiscal shifts have fueled investor interest in defence stocks as strategic assets . Key defence ETFs blend aerospace, weapons, cybersecurity and related tech. For example, VanEck’s Defense UCITS ETF (DFNS) offers global exposure. Its top 10 holdings (as of Apr 2025) include Palantir (≈10%) , Leonardo (7.7%) , Thales (7.5%) , RTX (6.9%) , Leidos (6.7%) , Hanwha Aerospace (6.7%) , Saab (6.4%) , Booz Allen (5.2%) , etc. Roughly 54% of DFNS’s assets are in U.S. companies, 20% Eurozone, 12% developed Asia. Sector-wise it is ~76% Industrials and ~24% Information Technology (reflecting hardware and cyber/security firms). DFNS (incepted Mar 2023) saw massive inflows in 2025 (about $1.9 billion YTD through March) as prices rallied. Similarly, Global X Defense Tech ETF (SHLD) targets the intersection of defence and advanced tech (AI, robotics, cybersecurity, next-gen systems). Its top 10 (May 2025) are 100% global defense leaders: Rheinmetall (10.7%) , Palantir (10.7%) , RTX (6.4%) , Leonardo (6.0%) , Thales (5.9%) , Northrop Grumman (5.4%) , General Dynamics (5.4%) , Lockheed Martin (5.0%) , Hanwha Aerospace (4.9%) , BAE Systems (4.9%) .