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VanEck Australia

  •   9 September 2024
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Australia’s first global defence ETF to help investors navigate rising geopolitical risk

Sydney, 9 September 2024 – In an Australian first, VanEck will be listing a global defence ETF on 12 September 2024 on ASX. The VanEck Global Defence ETF (ASX:DFND) offers exposure to a portfolio of leading defence companies across diverse sectors such as aerospace, communications, security software and training.

With rising geo-political risks being a key consideration for portfolio construction, investors around the world have been assessing how the changing global security environment impacts government expenditure and, ultimately, the deployment of capital. 

In 2023, a report by the Stockholm International Peace Research Institute (SIPRI) showed global military expenditure had grown 7% to US$2.43 trillion. This is the steepest annual rise since 2009, reflecting an increased focus on national security as international peacekeeping has deteriorated. The industry is expected to grow nearly 40% to US$3.1 trillion by 2030.

Arian Neiron, VanEck CEO and Managing Director, Asia Pacific said: “Unfortunately, the world has changed since the days of celebrating the peace dividend. Where countries used to extol the economic benefits of reduced defence spending, they’re ramping up military expenditure. Investors are adapting to the likely reality that this will keep rising in the years ahead.

“DFND extends on VanEck’s global footprint. In Europe, we were the first to launch a global defence fund, attracting substantial flows since launch in 2023. Given strong demand locally and the consistent and identifiable trends supportive of the sector’s growth, we decided to bring this investment strategy to the ASX.

“Global defence companies benefit from a unique investment complex. Demand is driven by structural growth drivers and cashflows are typically secured by long-term government mandates. This can be a strategic allocation for investors, providing a different form of equity risk management.

“The defence industry has historically been at the forefront of technological development and advancement. This sector generally places a greater emphasis on research and development, leading to numerous innovations that have filtered through to mainstream applications such as GPS navigation, epinephrine autoinjectors (better known as EpiPens), the internet, and super glue,” Neiron said.

The launch of DFND brings VanEck’s total number of ETFs on ASX to 43 and extends on the business’ commitment to innovation and helping investors access the opportunities.

 

  •   9 September 2024
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