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Highlights

  • Global defense spending surged 9.4% in 2024 to USD 2.7 trillion, with further growth projected through 2030.
  • The Global X Defense Tech ETF (SHLD) focuses on cybersecurity, AI, and advanced military technologies with one-year returns of over 82%.
  • The Select STOXX® Europe Aerospace & Defense ETF (EUAD) targets Europe’s leading defense and aerospace players.

Global defense spending soared 9.4% year-over-year to USD 2.7 trillion in 2024, driven by geopolitical tensions and technological modernization across regions like Europe and the Middle East, according to the Stockholm International Peace Research Institute (SIPRI). With defense budgets projected to reach USD 3.6 trillion by 2030, market players are increasingly looking to capture growth in this sector through specialized ETFs.

Two funds standing out in this landscape are the Global X Defense Tech ETF (SHLD) and the Select STOXX® Europe Aerospace & Defense ETF (EUAD), each offering focused exposure to key segments of the booming defense industry.

Global X Defense Tech ETF (SHLD)

The Global X Defense Tech ETF (SHLD) aims to capture growth in the rapidly evolving defense technology sector by investing in companies involved in cybersecurity, artificial intelligence, big data, and advanced military systems like robotics and aircraft. The fund seeks to mirror the price and yield performance, before fees and expenses, of the Global X Defense Tech Index, offering targeted exposure to innovations shaping modern defense capabilities.

The top three holdings of SHLD include Palantir Technologies (8.39%), Rheinmetall AG (8.33%), and RTX Corporation (7.82%).

As of June 30, 2025, the Global X Defense Tech ETF has delivered a one-year return of 82.43% at NAV and 82.89% at market price, closely tracking its index’s 83.51% return. Since its inception, the fund has achieved a cumulative return of over 64%.

On the daily chart, SHLD's ETF prices are undergoing an uptrend characterized by higher highs and higher lows, indicating a positive bias. In contrast, the 14-period Relative Strength Index (RSI) is forming multiple top divergences in relation to prices, anticipating a potential minor correction. Prices are trading above both trend-following indicators, 21-period and 50-period SMAs, which might serve as dynamic support levels for the ETF; in contrast, the ETF’s next round level may act as a resistance. A significant support level for the ETF is positioned at USD 56.00, while critical resistance level is situated at USD 65.00.

Select STOXX® Europe Aerospace & Defense ETF (EUAD)

The Select STOXX® Europe Aerospace & Defense ETF (EUAD) provides focused exposure to companies headquartered in Europe, generating at least half their revenue from producing and servicing aerospace and defense equipment, systems, and related technologies for both civil and military use. The fund seeks to replicate, before fees and expenses, the price and yield performance of the STOXX® Europe Total Market Aerospace & Defense Index, offering focused exposure to the European defense and aerospace industry.

The top three holdings of EUAD include Airbus SE ADR (22.3%), Safran SA ADR (15.7%), and Rheinmetall AG ADR (14.6%).

As of June 30, 2025, the Select STOXX® Europe Aerospace & Defense ETF delivered a six-month return of approximately 77.8% at NAV and 62.20% at market price, closely tracking its index’s performance. Since its inception, the fund has achieved a cumulative return of around 72.4%.

On the daily chart, EUAD's ETF prices are undergoing an uptrend characterized by higher highs and higher lows, indicating a positive bias. In contrast, the 14-period Relative Strength Index (RSI) is forming multiple top divergences in relation to prices, anticipating a potential minor correction. Prices are trading above both trend-following indicators 21-period and 50-period SMAs, which might serve as dynamic support levels for the ETF; in contrast, the ETF’s next round level may act as a resistance. A significant support level for the ETF is positioned at USD 38.94, while critical resistance level is situated at USD 45.00.

ETFs such as SHLD and EUAD are thriving, driven by rising interest in defense innovation and a shifting security landscape. Though recent gains are notable, price swings remain possible. Over time, advances in technology and geopolitical shifts may keep the defense sector firmly in market focus.

However, it's important to remember that past performance is not a reliable indicator of future results. When selecting an ETF, it's essential to consider individual sector preferences, risk tolerance, and the specific performance of the underlying index.

Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Abbreviations

CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index