This ETF from Global X Europe Provides Access to the Future of Defence and Security

Global X ETFs Europe has launched the Defence Tech UCITS ETF (ARMR), now trading on multiple European exchanges. This ETF, with a total expense ratio (TER) of 0.50%, offers investors the possibility to benefit from the latest developments in cutting-edge technologies contributing to national defence.

How ARMR ETF Works

The ARMR ETF seeks to replicate the performance of the Mirae Asset Defence Tech Index, which tracks companies positioned to benefit from innovations in defense technology. The Index includes companies from sub-sectors such as cybersecurity, advanced military systems, and cutting-edge defense technologies like AI, IoT, robotics, and augmented/virtual reality. These companies are involved in the development of systems and hardware for local and national security, including mission-critical tools such as radar, drones, military vehicles, and geospatial intelligence solutions.

To qualify for inclusion, companies must generate more than 50% of their revenue from these defense-related activities (Pure-Play), ensuring a focused exposure to the sector. The Index prioritizes firms that specialize in military-grade products and services, including advanced weapon systems, sensor arrays, cybersecurity, and surveillance.

Eligible companies are selected based on strict criteria, including a minimum market capitalization of $200 million and average daily trading volumes of at least $2 million. The Index is composed of up to 50 Pure-Play companies, weighted by free float market capitalization, with a single security cap of 8%, ensuring diversification while maintaining exposure to leading defense innovators across developed and emerging markets.

The fund currently holds, as of September 13th 2024, 34 positions, with its top 10 holdings comprising 75% of its assets.

1. Palantir Technologies Inc. Class A – 11.65%
2. Lockheed Martin Corp. – 8.86%
3. RTX Corporation – 8.37%
4. Northrop Grumman Corp. – 7.98%
5. L3Harris Technologies Inc. – 7.41%
6. General Dynamics Corp. – 7.31%
7. BAE Systems PLC – 7.28%
8. Rheinmetall AG – 6.47%
9. Leidos Holdings Inc. – 5.33%
10. Thales SA – 3.82%

Keep in mind that holdings are subject to change.

Why You Should Consider ARMR ETF

Investors might want to take a closer look at the ARMR ETF as global defense spending continues to rise at an impressive pace, growing at an annualized rate of 4.4% since 2020—almost four times the pre-pandemic rate. In fact, defense spending saw its sharpest increase in over a decade from 2022 to 2023, reaching the highest levels ever recorded.

As governments invest more in advanced military systems, there’s increasing demand for cutting-edge technology, including AI chips, sensors, and networking solutions, which could fuel innovation across the defense industry.

The ARMR ETF offers exposure to key areas like industrials, cybersecurity, and artificial intelligence, making it well-positioned to capture growth in defense tech. Unlike other sectors, defense spending is less tied to the ups and downs of the general economy, providing a level of resilience that may appeal to investors looking for stability in uncertain times.

Global X pairs Defense ETF launch with New AI ETF

Global X ETFs Europe has also introduced the AIQU ETF, giving investors access to companies set to benefit from advancements in artificial intelligence. Trading across multiple European exchanges, AIQU has a lower expense ratio of 0.40%, compared to ARMR.

“We are dedicated to providing our investors with access to the most relevant and innovative investment themes,” said Rob Oliver, Head of Global X ETFs Europe. “The launch of our AI and Defence Tech UCITS ETFs underscores our commitment to expanding our brand in Europe and empowering investors to capitalise on sectors that are vital to the future of our continent. By focusing on AI and defence technology, we are offering strong growth potential while supporting Europe's strategic priorities for technological advancement and security.”           

About Global X ETFs

Global X ETFs, founded in 2008, has spent over 15 years empowering investors with innovative and intelligent solutions. The firm's product lineup includes a wide range of ETF strategies and boasts over $80 billion in global assets under management. While Global X is best known for its Thematic Growth, Income, Commodity, and International Access ETFs, it also offers Core, Risk Management, and other solutions tailored to various investment objectives. More information about their ETFs, insights, and services can be found at www.globalxetfs.eu.

Global X is part of Mirae Asset Financial Group, a global leader in financial services managing more than $602 billion in assets worldwide. Mirae Asset's extensive ETF platform spans multiple regions, including the US, Australia, Brazil, Canada, Colombia, Europe, Hong Kong, India, Japan, Korea, and Vietnam, with over $119 billion in assets under management.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.