Top 8 defence ETFs to watch in 2026
The hardware in a modern military comes from companies anyone can hold through a fund.
Defence ETFs hold shares in the companies that build military aircraft, weapons systems, and national security technology – the contractors governments commission when they allocate defence spending. The eight funds on this list differ in geographic focus and structure: Select STOXX Europe Aerospace & Defense ETF ($EUAD) aims to track European manufacturers, Themes Transatlantic Defense ETF ($NATO) focuses on companies from NATO member countries, and ARK Space Exploration & Innovation ETF ($ARKX) is the only actively managed fund of the eight.
How we built this list: We selected these funds based on their industry or investment category and ordered them by assets under management. Prices are updated daily, and the list and supporting content are reviewed roughly every quarter. All data is sourced from Stake. This list isn't a recommendation and isn't ordered by suitability.
ETF Name | Ticker | Share Price | AUM | Expense Ratio | In Watchlists |
|---|---|---|---|---|---|
iShares US Aerospace & Defense ETF | ITA | $246.08 | $14.10B | 0.37% | 483 |
Invesco Aerospace & Defense ETF | PPA | $179.14 | $8.48B | 0.58% | 165 |
Global X Defense Tech ETF | SHLD | $64.37 | $7.00B | n/a | 0 |
State Street SPDR S&P Aerospace & Defense ETF | XAR | $273.63 | $6.19B | 0.35% | 347 |
Select STOXX Europe Aerospace & Defense ETF | EUAD | $46.07 | $1.20B | 0.45% | 0 |
ARK Space Exploration & Innovation ETF | ARKX | $31.59 | $759.4M | 0.74% | 1760 |
State Street SPDR S&P Kensho Future Security ETF | FITE | $110.27 | $147.7M | 0.45% | 0 |
Themes Transatlantic Defense ETF | NATO | $42.54 | $105.3M | 0.35% | 0 |
Past performance is not a reliable indicator of future performance.
Source: Stake market data. Figures in US$. Data updated as of 3 August 2026.
Sign up in minutes and get access to a CHESS-sponsored platform, where you can explore Defence ETFs and more.
1. iShares US Aerospace & Defense ETF ($ITA)
iShares US Aerospace & Defense ETF (ITA) share price over the last year: started at US$197.91, ended at US$246.08, a change of +24.3%. Range over the period: high US$250.78, low US$193.24. Source: Stake market data. Past performance is not a reliable indicator of future performance.
Price: US$246.08 · Daily: 2.7% · AUM: US$14.10B · MER: 0.37%
The iShares US Aerospace & Defense ETF ($ITA) aims to track the Dow Jones US Select Aerospace & Defense Index, a benchmark covering US-listed companies in the aerospace and defence sector. The fund is designed to hold at least 90% of its assets in the index's constituent securities or in depositary receipts representing them. That structure keeps the portfolio tightly concentrated on US aerospace and defence equities.
Because those holdings are priced in USD, the AUD/USD exchange rate affects how the fund performs when measured in Australian dollars. For investors whose base currency is AUD, that currency exposure sits alongside the underlying sector's own performance as a factor shaping returns.
2. Invesco Aerospace & Defense ETF ($PPA)
Invesco Aerospace & Defense ETF (PPA) share price over the last year: started at US$146.94, ended at US$179.14, a change of +21.9%. Range over the period: high US$185.59, low US$144.80. Source: Stake market data. Past performance is not a reliable indicator of future performance.
Price: US$179.14 · Daily: 2.7% · AUM: US$8.48B · MER: 0.58%
Invesco Aerospace & Defense ETF ($PPA) aims to track the SPADE Defense Index, which covers companies in the aerospace and defence sector. The fund is designed to hold at least 90% of its assets in the common stocks that make up the index, weighted in proportion to their index weightings.
Because the underlying holdings are denominated in US dollars, Australian investors in $PPA carry exposure to movements between the Australian dollar and the USD. A stronger AUD relative to the USD would reduce returns when measured back in Australian dollars, while a weaker AUD would do the opposite.
$PPA's 0.58% management expense ratio reflects the cost of running a specialist sector fund built around a single-theme index.
3. Global X Defense Tech ETF ($SHLD)
Global X Defense Tech ETF (SHLD) share price over the last year: started at US$61.96, ended at US$64.37, a change of +3.9%. Range over the period: high US$78.02, low US$58.20. Source: Stake market data. Past performance is not a reliable indicator of future performance.
Price: US$64.37 · Daily: 1.8% · AUM: US$7.00B
Global X Defense Tech ETF ($SHLD) aims to track the Global X Defense Tech Index, putting at least 80% of its net assets into the securities that make up that index. The index targets companies in the defence technology space, so the portfolio is built around that specific corner of the broader defence sector rather than covering the full range of aerospace and defence contractors.
4. State Street SPDR S&P Aerospace & Defense ETF ($XAR)
State Street SPDR S&P Aerospace & Defense ETF (XAR) share price over the last year: started at US$216.90, ended at US$273.63, a change of +26.2%. Range over the period: high US$292.74, low US$211.91. Source: Stake market data. Past performance is not a reliable indicator of future performance.
Price: US$273.63 · Daily: 3.3% · AUM: US$6.19B · MER: 0.35%
State Street SPDR S&P Aerospace & Defense ETF ($XAR) aims to replicate the S&P Aerospace & Defense Select Industry Index, which is drawn from the aerospace and defence segment of the S&P Total Market Index. That means the fund is focused on U.S.-listed companies in the aerospace and defence industry.
Because the underlying holdings are priced in USD, the fund carries currency exposure between the U.S. dollar and the Australian dollar. When the AUD strengthens against the USD, that tends to weigh on returns measured in Australian dollars, and vice versa. The fund's MER is 0.35%.
Join 750K on Stake
Effortless investing in Aussie and U.S. shares
5. Select STOXX Europe Aerospace & Defense ETF ($EUAD)
Select STOXX Europe Aerospace & Defense ETF (EUAD) share price over the last year: started at US$42.09, ended at US$46.07, a change of +9.5%. Range over the period: high US$48.28, low US$37.64. Source: Stake market data. Past performance is not a reliable indicator of future performance.
Price: US$46.07 · Daily: 2.5% · AUM: US$1.20B · MER: 0.45%
Select STOXX Europe Aerospace & Defense ETF ($EUAD) aims to track the STOXX Europe Total Market Aerospace & Defense Index. The index is built from common stock of European companies whose primary business covers the manufacture, service, supply and distribution of aerospace equipment, systems and technology – covering both civil and military applications. Because the underlying holdings are priced in European currencies rather than Australian dollars, the fund carries currency exposure between those currencies and the AUD.
6. ARK Space Exploration & Innovation ETF ($ARKX)
ARK Space Exploration & Innovation ETF (ARKX) share price over the last year: started at US$26.52, ended at US$31.59, a change of +19.1%. Range over the period: high US$37.74, low US$25.46. Source: Stake market data. Past performance is not a reliable indicator of future performance.
Price: US$31.59 · Daily: 3.2% · AUM: US$759.4M · MER: 0.74%
The only actively managed fund in this article, ARK Space Exploration & Innovation ETF ($ARKX) has a portfolio team picking holdings rather than following a fixed index. The fund aims to invest at least 80% of its assets in domestic and foreign equity securities of companies involved in space and defence innovation. That theme can include companies from outside the U.S., so the portfolio carries exposure to currencies other than the Australian dollar.
7. State Street SPDR S&P Kensho Future Security ETF ($FITE)
State Street SPDR S&P Kensho Future Security ETF (FITE) share price over the last year: started at US$76.95, ended at US$110.27, a change of +43.3%. Range over the period: high US$118.50, low US$76.35. Source: Stake market data. Past performance is not a reliable indicator of future performance.
Price: US$110.27 · Daily: 3.4% · AUM: US$147.7M · MER: 0.45%
The Kensho Future Security Index underpins State Street SPDR S&P Kensho Future Security ETF ($FITE), which aims to track companies whose products and services are driving innovation in future security. The fund is designed to hold at least 80% of its total assets in the securities comprising that index.
$FITE aims to capture total return performance from the index – covering both price changes and income distributions across the underlying securities. The fund is priced in USD, which means Australian investors carry AUD/USD currency exposure alongside the equity risk of the portfolio.
8. Themes Transatlantic Defense ETF ($NATO)
Themes Transatlantic Defense ETF (NATO) share price over the last year: started at US$36.39, ended at US$42.54, a change of +16.9%. Range over the period: high US$44.22, low US$35.37. Source: Stake market data. Past performance is not a reliable indicator of future performance.
Price: US$42.54 · Daily: 2.4% · AUM: US$105.3M · MER: 0.35%
Themes Transatlantic Defense ETF ($NATO) aims to track an index composed of aerospace and defence companies from NATO member countries. The fund's mandate ties its holdings to that alliance rather than the contractors of any single nation.
At least 80% of $NATO's net assets go into securities that make up the index directly. The remaining portion can be held through American Depositary Receipts (ADRs) or Global Depositary Receipts (GDRs) – instruments that represent shares in foreign companies but settle through other exchanges – provided those instruments are linked to index constituents.
Holdings are denominated in the currencies of NATO member states, which means the fund carries exposure to those currencies relative to the Australian dollar.
Common questions
How do I invest in defence ETFs in Australia?
All eight funds in this article trade on U.S. exchanges, so you'll need a brokerage platform that supports U.S. market trading. You buy by ticker – $ITA, $SHLD, $NATO and so on – the same way as any U.S.-listed stock. Because the funds are priced in USD, movements in the AUD/USD exchange rate affect what you pay and what you receive when you sell.
What are the key risks of defence ETFs?
These funds invest in an industry whose revenues depend on government budgets and policy decisions, so shifts in political priorities or treaty commitments can affect company earnings. Concentration is a related concern – several funds here invest almost entirely within aerospace and defence, with limited diversification into other industries. Currency exposure adds another layer: all eight funds are priced in USD, and some hold companies whose underlying earnings are in other currencies, so AUD movements against the USD and other currencies affect returns for Australian investors. Funds that focus on narrower themes – space exploration or future-security innovation – can also carry more company-specific risk than those tracking broader sector indexes.
How do these defence ETFs differ from each other?
Geography and investment theme are the main dividing lines. $ITA and $XAR aim to track indexes built from U.S. equities in aerospace and defence, while $EUAD draws from European companies and $NATO covers businesses across North Atlantic Treaty Organization member nations. The thematic funds – $SHLD and $FITE – focus on defence technology and future-security innovation rather than the broader sector. $ARKX takes a different approach: it's actively managed with a mandate spanning space exploration and defence innovation, so a portfolio manager selects the holdings rather than following an index.
Disclaimer
Past performance is not a reliable indicator of future performance. When you invest, your capital is at risk. You should consider your own investment objectives, financial situation, and particular needs before making an investment decision. The value of your investments can go down as well as up and you may receive back less than your original investment. As always, do your own research and consider seeking appropriate financial advice before investing.
This is not personal financial advice nor a recommendation to invest in the securities listed. Any advice provided by Stake is of general nature only and does not take into account your specific circumstances. Trading and volume data from the Stake investing platform is for reference purposes only, the investment choices of others may not be appropriate for your needs and is not a reliable indicator of performance.
Please refer to hellostake.com/pricing for the fees that apply. When you trade securities priced in another currency, currency conversion fees may apply and movements in the exchange rate may affect your returns.
Stake Desk
The freshest market insights
This article combines AI and human review from our analysts to bring you accurate, informative investing content at speed. For questions or suggestions, contact stakedesk@stake.com.au.
Subscribe
By subscribing, you agree to our Privacy Policy.
