Betashares has unveiled its latest ETF offering which provides access to leading global defense companies aligned with NATO allied countries.
The Betashares Global Defense ETF (ASX: ARMR) invests in a portfolio of up to 60 leading companies that derive more than 50% of their revenue from the development and manufacturing of military and defense equipment, such as Lockheed Martin, Palantir Technologies and BAE. Systems.
It will include companies headquartered in NATO member countries and major NATO allies, such as Australia, South Korea and Japan.
The ETF marks Betashares’ 96th fund to launch on the ASX.
“Due to the changing geopolitical landscape, NATO-aligned countries are increasing spending to levels not seen since the Cold War to bolster their defenses,” observed Betashares CEO Alex Vynokur.
“This supports the strong projected revenue and cash flow growth for many ARMR portfolio companies.
“Moreover, additional defense spending has historically supported innovative technological developments with commercial applications. »
The fund manager highlighted the significant increase in global spending in response to the growing complexity of modern threats and technological advancements, with every region of the world seeing growth in defense spending in 2023.
He also noted that NATO-aligned countries were seeking to strengthen their strategic positions, with many major governments announcing greater spending plans for the future, particularly on the European continent.
“ARMR is designed as a satellite portfolio exposure, allowing investors and their financial advisors to gain targeted exposure to the defense and security sector, complementing a well-diversified portfolio of stocks, bonds and other assets,” he says.
Last week, Global X announced the launch of its Defense Tech ETF (ASX: DTEC) on Australian shores. The fund, listed on NYSE Arca since 2023, provides exposure to sectors crucial to the future of defense, including AI, drones and cybersecurity.
Before that, VanEck launched its own defense ETF (ASX:DFND) in September, which is believed to be the first defense ETF on the ASX.
At the time, Arian Neiron, the fund manager’s Asia-Pacific managing director, observed that the world had sadly changed “since the days of celebrating peace dividends.”
“Where countries have been touting the economic benefits of reducing defense spending, they are increasing their military spending,” he said.
“Investors are adjusting to the likely reality that this trend will continue to increase in the years to come. »
