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The 10 Best-Performing Defense ETFs to Buy in 2026

An Asia-focused defense ETF leads performance in 2026 as global military spending and geopolitical tensions drive sector gains.

Equity exchange-traded funds tracking stocks in aerospace and defense have had a strong start to the year, extending the prior year’s rally as open-ended wars continue to rage globally.

The Russian invasion of Ukraine and multiple conflicts in the Middle East mean that defense spending is no longer just reactive to rare geopolitical events, but set to remain at a constant high level. As a result, investor interest in defense stocks has remained at a consistently high level, rather than ebbing and flowing in response to geopolitical events.

Defense stocks have outperformed global equity markets in 2026, after having gained 36.8% in 2025. The Morningstar Global Aerospace & Defense Index is up 7.8% year to date through March 19 in euro terms. That compares with a 0.70% gain in the Morningstar Global Markets Index over the same period.

Top contributors to the rally include US defense giants GE Aerospace GE and RTX Corp RTX, as well as the largest UK-listed defense stock by market capitalization, Rolls-Royce RR.

The biggest investment driver is simple: More global tension leads to higher defense budgets, which eventually means more revenue for defense companies. According to specialized research provider Forecast International, global top-line defense spending is expected to reach USD 2.6 trillion by the end of 2026, marking an 8.1% increase over 2025.

Europe-domiciled thematic exchange-traded funds exposed to the defense sector have been under the spotlight, with about EUR 3.0 billion of net inflows so far in 2026.

The 10 Best-Performing Defense ETFs in 2026

Exchange-traded funds can offer a simple and inexpensive way to invest in the defense sector. European investors can choose from 19 different ETFs exposed to the industry, most of which were launched in 2025. The top 10 performers since the start of the year are:

  1. Future of Defence Indo-Pac ex-China UCITS ETF QUAD
  2. VanEck Defense ETF A USD Acc DFNS
  3. Global X Defence Tech UCITS ETF ARMR
  4. Invesco Defence Innovation UCITS ETF IDFN
  5. Global X Europe Focused Defence Tech UCITS ETF EUR Acc ED3F
  6. WisdomTree Europe Defence UCITS ETF EUDF
  7. iShares Europe Defence UCITS ETF EUR DFNC
  8. Future of European Defence Screened UCITS ETF Acc 8RMY
  9. SPDR S&P Europe Defense Vision UCITS ETF EUR Unhedged Acc DFSV
  10. First Trust Indxx Global Aerospace & Defence UCITS ETF MISL

Metrics for the Best-Performing Defense ETFs

Future of Defence Indo-Pac ex-China UCITS ETF QUAD

Over the past month, the passively managed Future of Defence Indo-Pac ex-China UCITS ETF rose 5.2%, while the average equity industrial materials fund lost 1.28%. The fund placed in the 15th percentile for performance and beat its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 14.17 percentage points. The fund has climbed 25.12% year to date, outperforming the average fund in its category, which rose 12.32%.

VanEck Defense ETF DFNS

The EUR 8 billion VanEck Defense ETF rose 3.74% over the past month. The gain on the passively managed fund beat the 1.28% loss on the average fund in the equity industrial materials category, leaving it in the 20th percentile for performance. The fund beat its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 12.71 percentage points. Year to date, the VanEck fund rose 20.06%, while the average fund in its category rose 12.32%.

Global X Defence Tech UCITS ETF ARMR

The passively managed Global X Defence Tech UCITS ETF gained 2.09% over the past month, outperforming the average fund in the equity industrial materials category, which fell 1.28%. The fund placed in the 22nd percentile for performance and beat its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 11.06 percentage points. The fund has gained 19.17% year to date, while the average fund in its category is up 12.32%.

Invesco Markets II PLC - Invesco Defence Innovation UCITS ETF IDFN

Over the past month, the passively managed Invesco Markets II PLC - Invesco Defence Innovation UCITS ETF rose 2.99%, while the average equity industrial materials fund lost 1.28%. The fund placed in the 32nd percentile for performance and beat its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 11.96 percentage points. The fund has climbed 18.98% year to date, outperforming the average fund in its category, which rose 12.32%.

Global X Europe Focused Defence Tech UCITS ETF ED3F

The Global X Europe Focused Defence Tech UCITS ETF fell 1.44% over the past month. The loss on the passively managed fund was worse than the 1.28% loss on the average fund in the equity industrial materials category, leaving it in the 40th percentile for performance. The fund edged out its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 7.53 percentage points. Year to date, the Global X fund rose 18.28%, while the average fund in its category rose 12.32%.

WisdomTree Europe Defence UCITS ETF EUDF

Over the past month, the passively managed WisdomTree Europe Defence UCITS ETF fell 0.51%, while the average equity industrial materials fund lost 1.28%. The fund placed in the 51st percentile for performance and edged out its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 8.46 percentage points. The fund has climbed 16.58% year to date, outperforming the average fund in its category, which rose 12.32%.

Shares V PLC - iShares Europe Defence UCITS ETF DFNC

The Shares V PLC - iShares Europe Defence UCITS ETF fell 2.24% over the past month. The loss on the passively managed fund was worse than the 1.28% loss on the average fund in the equity industrial materials category, leaving it in the 45th percentile for performance. The fund edged out its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 6.73 percentage points. Year to date, the iShares fund rose 15.67%, while the average fund in its category rose 12.32%.

HANetf ICAV - Future of European Defence Screened UCITS ETF 8RMY

The passively managed HANetf ICAV - Future of European Defence Screened UCITS ETF lost 4.4% over the past month, falling further than the average fund in the equity industrial materials category, which fell 1.28%. The fund placed in the 63rd percentile for performance and edged out its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 4.57 percentage points. The fund has gained 14.27% year to date, while the average fund in its category is up 12.32%.

State Street SPDR S&P Europe Defense Vision UCITS ETF DFSV

The State Street SPDR S&P Europe Defense Vision UCITS ETF fell 3.42% over the past month. The loss on the passively managed fund was worse than the 1.28% loss on the average fund in the equity industrial materials category, leaving it in the 56th percentile for performance. The fund edged out its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 5.55 percentage points. Year to date, the State Street fund rose 13.08%, while the average fund in its category rose 12.32%.

First Trust Indxx Global Aerospace & Defence UCITS ETF MISL

The passively managed First Trust Indxx Global Aerospace & Defence UCITS ETF lost 3.83% over the past month, falling further than the average fund in the equity industrial materials category, which fell 1.28%. The fund placed in the 58th percentile for performance and edged out its benchmark, the Morningstar Global Basic Materials Target Market Exposure Index, by 5.14 percentage points. The fund has gained 11.92% year to date, while the average fund in its category is up 12.32%.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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