Global X Defense Tech ETF Market Outlook and Trends

The Global X Defense Tech ETF market is expected to grow significantly in the coming years, driven by increasing global tensions and the need for advanced defense technologies.

The ETF has a diverse portfolio of 43 holdings, including companies like Lockheed Martin and Northrop Grumman, which are major players in the defense industry.

Investors are drawn to the ETF's focus on emerging technologies like artificial intelligence, cybersecurity, and hypersonic missiles, which are expected to play a major role in future defense systems.

As the global defense landscape continues to evolve, the Global X Defense Tech ETF is well-positioned to capitalize on these trends and provide investors with a diversified portfolio of defense-related stocks.

The Global X Defense Tech ETF is designed to track the performance of the Global X Defense Tech Index. This index is owned and developed by Global X Management Company LLC, an affiliate of the fund and its investment adviser.

The ETF invests at least 80% of its net assets, plus borrowings for investment purposes, in the securities of the Global X Defense Tech Index. This index may include common stocks, American Depositary Receipts (ADRs), and Global Depositary Receipts (GDRs) based on the securities in the underlying index.

The fund is non-diversified, meaning it concentrates its investments in a relatively small number of companies, which can increase its potential for higher returns but also increases the risk of losses.

The Global X Defense Tech ETF is the first ETF focused on defense technology, aiming to track the performance of the Global X Defense Tech Index. This index is owned and developed by Global X Management Company LLC, an affiliate of the fund and the fund's investment adviser.

The SHLD ETF invests in companies specializing in cyber defense, which is a rapidly growing field. This is evident in the fund's focus on companies that provide cutting-edge technology to protect against cyber threats.

The fund has a specific investment objective, which is to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Global X Defense Tech Index. This means that the fund aims to replicate the performance of the underlying index as closely as possible.

The fund is required to invest at least 80% of its net assets, plus borrowings for investment purposes (if any), in the securities of the Global X Defense Tech Index. This ensures that the fund remains focused on the defense technology sector.

The fund is non-diversified, which means that it may invest in a smaller number of securities compared to a diversified fund. However, this also means that the fund may be more concentrated in certain areas of the defense technology sector.

Aerospace and defense ETFs have surged in the past year, beating the broader market.

This is a significant trend to note, especially as the U.S. stock market has broadly stumbled.

Aerospace and defense ETFs are up so far this week, showing resilience in a challenging market environment.

Their performance is a clear contrast to the S&P 500, which has struggled to gain traction.

The aerospace and defense sector has been a standout performer, offering investors a safe haven from market volatility.

The Global X Defense Tech ETF, also known as SHLD, is a unique investment opportunity that combines defense and technology. It's the first ETF to focus on defense technology, aiming to track the performance of the Global X Defense Tech Index.

SHLD invests in companies that specialize in cyber defense, artificial intelligence, and other emerging technologies for government and military applications. This ETF includes international stocks, making it distinct from other defense sector ETFs.

One of the standout features of SHLD is its focus on emerging technologies. For example, it holds companies like Rheinmetall AG, which develops advanced defense systems, and Lockheed Martin Corp, a leader in aerospace and defense technology.

Here's a breakdown of the top holdings in SHLD as of May 31, 2024:

SHLD also includes international stocks like BAE Systems PLC from the UK and Rheinmetall AG from Germany, making it a truly global investment opportunity.

The Global X Defense Tech ETF is a unique investment vehicle that offers exposure to the defense technology sector. Its top holdings are a key factor in understanding its investment strategy.

The ETF's top holdings are dominated by large-cap defense companies, with RTX Corporation and Palantir Technologies Inc. holding the top two spots, making up 16.51% of the portfolio. This is a significant concentration of assets in the defense technology sector.

The top holdings of the ETF are subject to change over time, as seen in the historical top holdings breakdowns. For example, on May 31, 2024, RTX Corporation was added to the portfolio, increasing its weight to 8.28%. Meanwhile, LSE:BA. was also added, increasing its weight to 2.34%.

Here are the top 10 holdings of the Global X Defense Tech ETF, ranked by their weight in the portfolio:

Investing in a Global X Defense Tech ETF comes with its own set of risks and challenges. The defense industry is heavily reliant on government contracts, which can be unpredictable and subject to changes in government policies.

The US government's budget for defense spending is a significant factor in the industry's performance. As seen in the article, the US defense budget has been steadily increasing, but it's still subject to fluctuations.

Cybersecurity risks are a major concern for defense tech companies, with many facing threats from nation-state actors and cyberterrorists. As mentioned in the article, defense tech companies are investing heavily in cybersecurity measures to protect themselves and their customers.

The defense industry is also heavily dependent on supply chain management, which can be a challenge due to the complex web of suppliers and manufacturers involved. This was highlighted in the article, where it was noted that even small disruptions in the supply chain can have significant impacts on the industry.

The Global X Defense Tech ETF (SHLD) is recommended over the iShares U.S. Aerospace and Defense ETF (ITA) due to its tech-oriented approach and better adaptability to new defense realities.

SHLD's holdings are more focused on emerging technologies, which is crucial in today's defense landscape where innovation is key.

As the US now faces organized opposition, SHLD's diversified portfolio can help investors navigate the changing defense landscape with more agility.

SHLD's tech-oriented approach allows it to adapt to new defense realities, making it a more attractive option for investors seeking to capitalize on emerging trends.

The Global X Defense ETF has holdings with valuations near or at all-time highs.

Valuations of defense technology sector companies are inflated, making them vulnerable to a downturn.

President-elect Trump's mixed signals on defense spending have created uncertainty in the market.

Defense stocks may be due for a correction, given their lofty valuations and uncertain future.

The Global X Defense Tech ETF's asset allocation is a crucial aspect to consider when investing in this fund.

The Global X Defense Tech ETF's asset allocation is comprised of various sectors within the defense technology industry.

Here's a breakdown of the fund's asset allocation:

The fund's asset allocation is as follows:

The Aerospace & Defense sector accounts for a significant portion of the fund's portfolio.

The fund's top holdings in the Aerospace & Defense sector include companies with market caps ranging from $1 billion to $10 billion.

Here's a more detailed breakdown of the fund's asset allocation:

The Global X Defense Tech ETF has a net asset value (NAV) of $42.3600 as of February 19, 2025.

Its price has fluctuated over the past 4 weeks, ranging from $39.00 to $42.97.

The ETF's 52-week price range is from $30.62 to $42.97, showing a significant increase over time.

As of the latest closing price, the ETF is trading at $41.90.

The expense ratio for this ETF is 0.5%, which is a relatively low cost for investors.