While much of the Australian share market has struggled to find its footing in 2025, one ASX ETF has quietly powered higher.
The Betashares Global Defence ETF (ASX: ARMR) has climbed more than 30% since its launch in October 2024, making it one of the strongest performers in an otherwise volatile start to the year. With geopolitical tensions on the rise and nations scrambling to rearm, investors are clearly paying attention.
So, is now the time to join them?
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Why the Betashares Global Defence ETF is gaining ground
The Betashares Global Defence ETF gives investors exposure to up to 60 leading defence contractors globally — companies that derive at least 50% of their revenue from military and defence operations. That includes household names like Lockheed Martin (NYSE: LMT), Raytheon, BAE Systems, General Dynamics (NYSE: GS), and Palantir Technologies (NASDAQ: PLTR).
The fund is also focused exclusively on companies based in NATO-aligned nations, including the US, UK, Germany, France, and key allies such as Japan and Australia. This alignment could prove important, with much of the new global defence spending being channelled through these governments.
Defence spending is ramping up
According to Betashares, global defence spending rose 7.4% in real terms last year to over US$2.4 trillion. That figure is only expected to rise as global uncertainty intensifies.
The US is pushing NATO allies to spend at least 5% of GDP on defence. In Europe, a proposed five-point rearmament plan could cost nearly 800 billion euros, while countries like Germany, Denmark, and the UK are pledging even more.
That spells opportunity for the companies at the heart of this supply chain.
Betashares notes that "defence contractors could see a significant increase in demand – even to levels that are comparable to what has happened in the artificial intelligence space."
For example, analysts tracking Rheinmetall — one of ARMR's key holdings — are forecasting 40% earnings per share growth annually for the next two years.
A rare bright spot in a tough market
While tech stocks have sold off and many other sectors have wobbled, Betashares Global Defence ETF has remained remarkably resilient. Its steady climb since launch suggests investors are starting to treat defence as more than just a niche — it's becoming a serious structural thematic.
There's no denying the world is becoming a more uncertain place. And while that brings obvious risks, it also creates clear investment opportunities.
This ASX ETF offers exposure to a powerful and growing trend — one that's being fuelled not by market sentiment, but by real-world policy shifts and multi-year funding commitments.
With Betashares recently naming it as a buy for those looking to tap into this theme, the Global Defence ETF could be one to consider this year.
