Global X Defense Tech ETF

SHLD

Market cap $6.8B

Global X Defense Tech ETF is my top pick for exposure to cutting-edge defense innovation and global diversification. SHLD stands out versus ITA and PPA by holding leading European and Asia-Pacific defense firms, not just U.S. names. Current geopolitical shifts and rising global defense budgets support an immediate bullish outlook for SHLD.

The Global X Defense Tech ETF (NYSEARCA:SHLD) and the SPDR S&P Aerospace & Defense ETF (NYSEARCA:XAR) look like two ways to buy the same rearmament story, but they take structurally different bets.

UK's $20B defense overhaul puts defense ETFs in focus as higher military spending could boost key holdings across the industry.

I rate the Global X Defense Tech ETF a "Buy," as valuation has become reasonable and technicals suggest a potential rebound. SHLD offers diversified exposure to global defense modernization, with a solid long-term EPS growth rate above 13% and a mid-20s P/E multiple. Recent underperformance and poor momentum have pushed SHLD to key long-term support near $60, where bullish seasonality may provide a catalyst.

According to the Stockholm International Peace Research Institute, military spending around the world is rising rapidly, having reached $2.9 trillion in 2025. Europe has led the way in this growth, with a 14% year-over-year (YOY) increase in military spending from 2024 to 2025.

iShares U.S. Aerospace & Defense ETF offers a lower expense ratio and a higher 1-year total return than Global X Defense Tech ETF. The Global X Defense Tech ETF provides broader exposure across technology and industrial sectors, while the iShares U.S. Aerospace & Defense ETF focuses exclusively on industrials.

Defense ETFs have multiplied as the global rearmament cycle has matured, and two of the most-followed products take very different routes to the same theme.

Defense drone stocks are surging at midday Thursday after a Wall Street Journal and CNBC report indicated the Pentagon is in talks with drone manufacturers about funding deals that could include direct federal equity stakes.

Registered investment advisors did not pull back on exchange-traded funds in the first quarter of 2026. They kept adding them, according to AdvizorPro's Q1 2026 Quarterly RIA ETF Trends Report.

Exchange traded fund inflows have topped $750 billion in 2026. This puts the industry on pace to challenge the $1.5 trillion annual record set last year, Todd Rosenbluth, head of research at VettaFi, told host Nate Geraci on this week's ETF Prime.