Global X Defense Tech ETF

SHLD

Market cap $4.82B

A $93 million US weapon sale to India puts the spotlight on defense stocks like LMT and, by extension, fuels momentum for defense ETFs like SHLD.

Defense industry firms rise and fall in the short term when investors fear war or expect sudden peace.  Instead, look at the big picture: defense is essential to our survival. I prefer strategic investment in defense ETFs over picking individual stocks, due to complex contract allocation and political factors. My top picks include Global X Defense Tech ETF, Select STOXX Europe Aerospace & Defense ETF, and WisdomTree Europe Defense Fund ETF.

Global X Defense Tech ETF has surged over 80% YTD, outperforming legacy defense ETFs like ITA due to its unique composition and global focus. SHLD excels by emphasizing tech-driven defense, broader geographic exposure—especially Europe—and a more diversified, growth-oriented portfolio than ITA. Despite higher fees and volatility, SHLD benefits from Europe's unprecedented rearmament cycle and the fusion of traditional and tech defense sectors.

Defense industry giants like Lockheed (LMT) and Raytheon (RTX) retain top spots, but innovative firms and European players are gaining ground. Boeing (BA) has fallen in defense revenue rankings, while newcomers like GE Aerospace (GE), SpaceX, and Palantir show strong growth potential. To capture defense innovation, I recommend ETFs such as SHLD, EUAD, and WDEF, with SHLD as a top pick for technology-driven exposure.

Most investors who track the market start and end the year comparing every result to two yardsticks, the SPDR S&P 500 ETF Trust (NYSE:SPY ) and the Invesco QQQ Trust (NASDAQ:QQQ ).

A fragile Gaza ceasefire and renewed violence are fueling investor demand for defense ETFs like ITA, SHLD and PPA.

Ideally, thematic ETFs capture long-term secular investment themes not fully represented by broad market or sector-based approaches. The best thematic index implementations make use of quantifiable measures such as revenue and market share to identify companies with meaningful exposure to specific themes.

The Global X Defense Tech ETF offers the best balance of European and US defense exposure, with strong performance and a focus on counter-drone solutions. Rising threat levels in Europe, especially from drone incursions, highlight the urgent need for advanced and cost-efficient counter-drone technologies. SHLD stands out for its substantial exposure to both European defense firms and pure-play counter-drone companies, outperforming US-focused ETFs like ITA and XAR.

The S&P 500 has served as an excellent benchmark for the state of U.S.

The S&P 500 has served as an excellent benchmark for the state of U.S.