Best Defence & Cybersecurity ETF?
Great newsletter. You have done well by us during turbulent times. Do you have a view on the BEST Defence & Cybersecurity ETF? For instance, DFND, ARMR, DTEC, HACK, BUGG? Many thanks, DavidJ
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Answer
Hi DJ,
Defence and cybersecurity stocks have been a growth area since President Trump came to power and this week the Federal Budget allocated an additional $53 billion in defence spending over the next decade, with particular focus on drones, cyber, electronic warfare and space.
Importantly, escalating Middle East tensions and the Hormuz conflict appear to have removed much of the remaining political resistance to higher defence spending globally. Australia’s latest National Defence Strategy effectively confirms the country is entering a sustained multi-year defence investment cycle, with spending trending toward 3% of GDP over time.
Defence is becoming a structural, government-backed investment trend likely to underpin the sector for the next decade. Moving onto ASX-traded ETFs, we believe the cleanest two-ETF solutions are:
DTEC for modern defence/AI/drone exposure — it captures the Iran war spending surge AND the technology evolution of warfare.
HACK for cybersecurity — largest, most liquid, most diversified, directly benefiting from Australia’s increased budget commitment,
However, it’s important to recognise that they’ve all struggled in 2026 after having rallied strongly between 2022 and 2025, with the DTEC and DFND only launching through the sector exuberance in 2024, i.e. plenty of the headline news over the last 6-months is already built into prices.
- We would be in wait and see mode here for the time being. From a timing perspective, any de-escalation in Iran would be a short term negative for the sector.
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BetaShares Global Cybersecurity ETF (HACK)
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BetaShares Global Cybersecurity ETF (HACK)
