Top 8 defence ETFs to watch in 2026

Defence ETFs hold shares in companies that build military aircraft, weapons systems, satellites and security technology. iShares US Aerospace & Defense ETF ($ITA), Invesco Aerospace & Defense ETF ($PPA) and State Street SPDR S&P Aerospace & Defense ETF ($XAR) all focus on U.S. companies in traditional aerospace and defence – but the eight funds in this list also reach into European manufacturers, NATO-member countries, and the companies pushing the frontier in deep space and future security technology.

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.

Past performance is not a reliable indicator of future performance.

Source: Stake market data. Figures in US$. Data updated as of 6 October 2026.

✅ Learn more: Top 10 defence stocks to watch in 2026→

1. iShares US Aerospace & Defense ETF ($ITA)

iShares US Aerospace & Defense ETF (ITA) share price over the last year: started at US$212.55, ended at US$208.26, a change of −2.0%. Range over the period: high US$253.22, low US$198.23. Source: Stake market data. Past performance is not a reliable indicator of future performance.

Price: US$208.26 · Daily: 0.6% · AUM: US$12.05B · MER: 0.37%

Tracking the Dow Jones US Select Aerospace & Defense Index, iShares US Aerospace & Defense ETF ($ITA) concentrates entirely on U.S.-listed equities in the aerospace and defence sector. The index acts as the filter – companies enter based on their classification within that sector, so the portfolio reflects the composition of the domestic U.S. defence industry rather than reaching into international names.

According to its mandate, $ITA aims to invest at least 90% of its assets in the index's constituent securities and in depositary receipts representing those securities. That keeps the fund closely aligned with its benchmark. The approach is index-driven: the index determines what's held, and the fund is designed to follow it.

2. Invesco Aerospace & Defense ETF ($PPA)

Invesco Aerospace & Defense ETF (PPA) share price over the last year: started at US$158.42, ended at US$156.20, a change of −1.4%. Range over the period: high US$185.59, low US$146.12. Source: Stake market data. Past performance is not a reliable indicator of future performance.

Price: US$156.20 · Daily: 0.5% · AUM: US$7.57B · MER: 0.58%

Invesco Aerospace & Defense ETF ($PPA) is built around the SPADE Defense Index, a benchmark covering companies tied to the aerospace and defence industry. The fund aims to hold at least 90% of its assets in the common stocks that make up that index, weighted in line with their index positions.

$PPA invests in equities directly, tracking the index's composition rather than using a sampling approach. The SPADE Defense Index draws from companies involved in areas like military technology, aerospace manufacturing and defence services – the same broad territory the article's intro describes as the core of this category. As with any equity fund, returns will move with the underlying holdings, and defence-sector stocks can be sensitive to government budget decisions, geopolitical shifts and contract cycles.

3. 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$247.03, ended at US$233.62, a change of −5.4%. Range over the period: high US$296.73, low US$218.75. Source: Stake market data. Past performance is not a reliable indicator of future performance.

Price: US$233.62 · Daily: 1.0% · AUM: US$5.64B · MER: 0.35%

State Street SPDR S&P Aerospace & Defense ETF ($XAR) aims to replicate the S&P Aerospace & Defense Select Industry Index, which represents the aerospace and defence segment of the S&P Total Market Index. The index draws its constituents exclusively from U.S. companies classified within aerospace and defence. As a select industry fund, $XAR concentrates on one specific corner of the U.S. market rather than blending the sector with broader industry exposure.

4. Select STOXX Europe Aerospace & Defense ETF ($EUAD)

Select STOXX Europe Aerospace & Defense ETF (EUAD) share price over the last year: started at US$46.49, ended at US$40.94, a change of −11.9%. 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$40.94 · Daily: -1.8% · AUM: US$1.01B · MER: 0.45%

The Select STOXX Europe Aerospace & Defense ETF ($EUAD) is designed to track the total return performance of the STOXX Europe Total Market Aerospace & Defense Index. That index holds common stock of companies based in Europe whose primary business covers manufacturing, servicing, supplying or distributing civil and military aerospace equipment, systems and technology. The European geographic focus gives $EUAD a different composition from the U.S.-centred aerospace and defence funds also in this list.

5. ARK Space Exploration & Innovation ETF ($ARKX)

ARK Space Exploration & Innovation ETF (ARKX) share price over the last year: started at US$31.45, ended at US$33.23, a change of +5.7%. Range over the period: high US$37.74, low US$25.74. Source: Stake market data. Past performance is not a reliable indicator of future performance.

Price: US$33.23 · Daily: 1.0% · AUM: US$759.9M · MER: 0.74%

ARK Space Exploration & Innovation ETF ($ARKX) is actively managed. A portfolio manager selects holdings rather than following a fixed index. The fund seeks long-term growth of capital through companies engaged in space and defence innovation, drawing from both domestic and foreign equity markets.

6. State Street SPDR S&P Kensho Final Frontiers ETF ($ROKT)

State Street SPDR S&P Kensho Final Frontiers ETF (ROKT) share price over the last year: started at US$79.97, ended at US$106.14, a change of +32.7%. Range over the period: high US$136.68, low US$72.93. Source: Stake market data. Past performance is not a reliable indicator of future performance.

Price: US$106.14 · Daily: 0.5% · AUM: US$175.1M · MER: 0.45%

State Street SPDR S&P Kensho Final Frontiers ETF ($ROKT) aims to track the S&P Kensho Final Frontiers Index, which covers companies driving innovation in deep space and deep sea exploration. That puts it in different territory from the traditional aerospace and defence names elsewhere in this list – the focus is on frontier exploration rather than defence contracting.

The fund is intended to hold at least 80% of its assets in the securities that make up the index. With $178.8M in assets under management, it remains a relatively modest fund by the standards of broad-market ETFs, which tends to be the case for thematic funds with a narrow mandate.

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$90.62, ended at US$114.09, a change of +25.9%. Range over the period: high US$119.56, low US$78.67. Source: Stake market data. Past performance is not a reliable indicator of future performance.

Price: US$114.09 · Daily: 0.9% · AUM: US$154.8M · MER: 0.45%

State Street SPDR S&P Kensho Future Security ETF ($FITE) is designed to track the Kensho Future Security Index, which covers companies whose products and services are pushing innovation in future security. That means the fund reaches into areas like cybersecurity, autonomous systems, space technology and next-generation defence – the kind of capabilities that sit at the frontier of how governments and militaries are rethinking security.

The index construction aims to capture companies driving that shift rather than established defence primes by revenue alone. $FITE charges a 0.45% management expense ratio (MER). The fund holds $152.1M in assets under management.

8. Themes Transatlantic Defense ETF ($NATO)

Themes Transatlantic Defense ETF (NATO) share price over the last year: started at US$39.26, ended at US$36.62, a change of −6.7%. 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$36.62 · Daily: -0.4% · AUM: US$91.3M · MER: 0.35%

The Themes Transatlantic Defense ETF ($NATO) tracks an index of companies from NATO member countries that have business operations in the aerospace and defence industry. That membership criterion shapes the portfolio toward allied-nation manufacturers and defence contractors, rather than concentrating on U.S. names alone.

To replicate the index, $NATO aims to hold at least 80% of its net assets in the index's constituent securities, plus ADRs (American depositary receipts) and GDRs (global depositary receipts). ADRs and GDRs are instruments that allow foreign-listed companies to be accessed through U.S. markets. That structure is designed to give the fund coverage across multiple member states without requiring direct positions on each country's local exchange.

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Common questions

How do I invest in defence ETFs in New Zealand?

All eight funds in this list trade on U.S. exchanges, so you buy them through a share trading platform that offers access to U.S. markets. You search by ticker, place an order during U.S. market hours, and hold the fund like any other share. The fund itself handles the underlying portfolio – tracking an index or, in the case of $ARKX, making active stock selections according to its space and defence innovation theme.

What are the key risks of defence ETFs?

Some of the key risks include sector concentration: these funds hold companies whose revenues depend heavily on government defence budgets, which can shift with policy changes or election cycles. Export controls and regulatory restrictions can affect individual holdings, and funds focused on space or emerging security technology carry additional uncertainty around earlier-stage companies. All eight funds here are priced in USD, so movements between the NZD and the USD affect what you pay to buy in and what sale proceeds are worth in NZD.

How do the different funds in this list compare?

The funds fall into distinct groups by geography and focus. Some track broad U.S. aerospace and defence indices, others hold European companies or companies from NATO member countries, and a handful concentrate on space exploration or future security technology. Most aim to replicate an index, but $ARKX is actively managed – a portfolio team makes the stock selections rather than following a benchmark. That active approach carries the highest management expense ratio in this list at 0.74%, while the index-tracking funds range from 0.35% to 0.58%.

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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.

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