From rising geopolitical tensions to the growing threat of cyberattacks, defence and security have never felt more front and centre. Governments are boosting budgets, companies are innovating, and investors are taking notice.
Defence ETFs give you a simple way to tap into this powerful theme, whether through global defence contractors, European players, or cutting edge cybersecurity firms. In this guide, we’ll explore the most popular defence ETFs available on InvestEngine in 2025, what makes them stand out, and how you can add them to your portfolio.
What are defence ETFs?
Defence ETFs are funds that group together shares of companies working in defence technology, military equipment, and cybersecurity. Instead of buying individual defence stocks, these ETFs give investors broad exposure to the sector in one simple trade.
They’re designed to capture the growth driven by rising global security spending, offering diversification, transparency, and cost efficiency compared to picking stocks one by one.
Why defence ETFs are gaining popularity in 2025
Global security has become one of the defining themes of recent years, and that’s flowing directly into investment markets. Governments around the world are boosting defence budgets, with NATO countries, the US, and Europe in particular ramping up spending on technology, equipment and cybersecurity.
At the same time, the rise in cyber threats, from state backed hackers to ransomware attacks, means defence is no longer just about tanks and aircraft. It’s also about protecting data, critical infrastructure, and entire economies.
For investors, this shift has made defence ETFs more attractive:
- Diversified exposure: one trade can give you access to a whole sector.
- Long term growth potential: defence spending tends to be less cyclical and can even grow regardless of the broader economy.
- Focus on innovation: from drones to cybersecurity, many defence companies are at the cutting edge of technology.
In 2025, with geopolitics tense and digital threats accelerating, more investors are looking to defence ETFs as a way to position their portfolios in line with these trends.
The 5 top defence ETFs for UK investors in 2025
With more and more investors looking to tap into the defence and security theme, there are now several ETFs available that make it easy to get exposure. To help narrow it down, we’ve highlighted five stand out options available on InvestEngine.
*This list of ‘Top ETFs’ is based on the most held defence ETFs on InvestEngine’s platform. Top ETFs have been calculated by most bought (by number of clients) between July 2024 and July 2025.
Future of Defence ETF (Ticker: NATP)
Provider: HANetf
Strategy: Tracks an index of companies involved in defence and security, including advanced weapon systems, cybersecurity and logistics, with a focus on firms contracted with NATO or allied nations.
Why consider it?
- A simple “one stop” way to back the global defence theme.
- Mix of established contractors and security tech names.
- Accumulating share class and a competitive TER for a thematic fund.
| Key Details | |
| Launched | 07 Feb 2024 |
| Fund Size | ~£308m |
| Ongoing Charges | 0.49% |
| Dividend Type | Accumulating |
| Region Focus | Global |
VanEck Defense (Ticker: DFNG)
Provider: VanEck
Strategy: Invests in companies across the defence industry (equipment, systems and defence technology), providing diversified exposure to the global security supply chain.
Why consider it?
- Broad global exposure to core defence names.
- One of the larger funds in this space on InvestEngine.
- Accumulating share class for easy compounding.
| Key Details | |
| Launched | 05 Apr 2023 |
| Fund Size | ~£636m |
| Ongoing Charges | 0.55% |
| Dividend Type | Accumulating |
| Region Focus | Global |
WisdomTree Europe Defence (Ticker: WDEP)
Provider: WisdomTree
Strategy: Pure play exposure to European defence companies, with index screens excluding firms involved in internationally banned weapons and certain norm violations.
Why consider it?
- Focused way to target Europe’s defence ramp-up.
- Index exclusions that some investors may prefer.
- Rapidly grown assets since launch, reflecting strong interest.
| Key Details | |
| Launched | 12 Mar 2025 |
| Fund Size | ~£2,418m |
| Ongoing Charges | 0.40% |
| Dividend Type | Accumulating |
| Region Focus | Europe |
Global X Defence Tech (Ticker: ARMG)
Provider: Global X
Strategy: Targets “defence tech” companies building and managing cybersecurity systems, using AI and big data, and producing advanced military hardware such as robotics and fuel systems.
Why consider it?
- A tech tilted take on defence, not just traditional contractors.
- Global portfolio with meaningful US and Europe exposure.
- Accumulating share class; straightforward for long term holders.
| Key Details | |
| Launched | 12 Sep 2024 |
| Fund Size | ~£117m |
| Ongoing Charges | 0.50% |
| Dividend Type | Accumulating |
| Region Focus | Global |
WisdomTree Cybersecurity (Ticker: CYSE)
Provider: WisdomTree
Strategy: Invests in companies focused on protecting data, networks and systems from cyber threats; the share class on InvestEngine is ESG screened and physically replicated.
Why consider it?
- Pure cybersecurity exposure within the broader defence theme.
- Longest trading history in this list (since 2021 on LSE).
- Low TER for a specialist thematic ETF.
| Key Details | |
| Launched | 28 Jan 2021 |
| Fund Size | ~£223m |
| Ongoing Charges | 0.45% |
| Dividend Type | Accumulating |
| Region Focus | Global (US tilted) |
Comparing the top 5 defence ETFs side by side
To help you see the key differences at a glance, we’ve pulled together the details of the five most popular defence ETFs available on InvestEngine. From costs and regions to performance and fund size, this table makes it easy to compare your defence investment options side by side.
| ETF Name | Ticker | Strategy | TER | Dividend Type | Launched | Region Focus | Fund Size |
| Future of Defence | NATP | Passive (global defence & security index) | 0.49% | Accumulating | 07 Feb 2024 | Global | ~£308m |
| VanEck Defense | DFNG | Passive (global defence industry index) | 0.55% | Accumulating | 05 Apr 2023 | Global | ~£636m |
| WisdomTree Europe Defence | WDEP | Passive (European defence companies index) | 0.40% | Accumulating | 12 Mar 2025 | Europe | ~£2,418m |
| Global X Defence Tech | ARMG | Passive (defence technology theme) | 0.50% | Accumulating | 12 Sep 2024 | Global | ~£117m |
| WisdomTree Cybersecurity | CYSE | Passive (cybersecurity companies index) | 0.45% | Accumulating | 28 Jan 2021 | Global (US tilted) | ~£223m |
Beyond the top 5: other defence & security ETFs worth watching
Our top 5 cover the biggest and most popular ways to invest in defence, but there are a few other ETFs on InvestEngine that deserve a mention. These funds zoom in on cybersecurity, digital security, and data privacy, fast growing areas that sit right at the heart of modern defence.
- Invesco Defence Innovation (DFNX): A future focused fund backing companies working on next-gen defence tech.
- L&G Cyber Security (ISPY): One of Europe’s most established cybersecurity ETFs, a simple way to back the sector.
- Rize Cybersecurity and Data Privacy (CYBP): Adds a twist by including firms that specialise in protecting personal and corporate data.
- First Trust Nasdaq Cybersecurity (FCBR): US tilted exposure to some of the biggest names in the global cybersecurity space.
- iShares Digital Security (SHLG): A broader take on digital security, including areas like identity protection and secure payments.
These funds may not be as large as the headline names, but they give investors a chance to fine tune their portfolios and add a more targeted play on the digital side of defence.
Risks and considerations when investing in defence ETFs
While defence ETFs are gaining attention, they’re not without risks. Here are a few key things to keep in mind before investing:
- Geopolitical uncertainty: heightened conflicts can drive defence stocks higher, but sudden peace agreements or policy shifts could reduce demand.
- Concentration risk: many defence ETFs hold a relatively small number of specialist companies, meaning less diversification than broader funds.
- Ethical concerns: some investors may feel uneasy about exposure to weapons or defence industries, which can limit appeal.
- Market volatility: like all equity investments, defence ETFs can be affected by broader market swings, they’re not immune to downturns.
- Currency exposure: global holdings mean exchange rate movements can add another layer of risk to returns.
In short: defence ETFs can play a role in a well balanced portfolio, but they shouldn’t be seen as risk free. As always, it’s wise to consider how they fit alongside your broader investment goals and risk tolerance.
How to choose the right defence ETF for you
Not all defence ETFs are built the same. Some lean more towards traditional defence contractors, while others focus on cybersecurity or cutting-edge tech. When deciding which fund might suit you, ask yourself:
- What’s inside? Some funds focus on traditional defence firms, others lean into cybersecurity or next-gen tech.
- Where’s the exposure? US, Europe, or global geography matters.
- How much does it cost? Expense ratios vary, and lower fees can boost long term returns.
- Is it easy to trade? Larger, more liquid ETFs are generally more stable.
- Does it fit my portfolio? Think about whether it’s a small satellite theme or a bigger long term play.
The best ETF isn’t a one size fits all pick, it’s the one that lines up with your goals, time horizon, and risk comfort.
How to buy defence ETFs easily with InvestEngine
Looking to invest in defence ETFs? InvestEngine makes it simple, low cost, and flexible, whether you’re just starting out or adding a new theme to your portfolio.
Why use InvestEngine?
- No trading fees or platform fees. Buy and sell Defence ETFs commission free, so more of your money goes into the market, not into costs (ETF costs apply).
- Powerful tools. Track your holdings, compare ETFs, and rebalance your portfolio with ease.
- Automate your investing. Set up a Savings Plan to invest regularly, just choose the amount and frequency, and InvestEngine takes care of the rest.
- Flexible account options. Pick from an ISA, SIPP, GIA, or Business Account, all with no platform fees on DIY portfolios.
Start investing in defence ETFs the easy way and position your portfolio for one of 2025’s fastest growing themes.
In summary
Defence and security are set to remain big themes in 2025 & 2026, and ETFs make it simple to invest in them. The five most popular Defence ETFs on InvestEngine offer different angles from global contractors to European players and pure cybersecurity while other specialist funds let you fine tune your exposure.
As always, think about the risks, your time horizon, and how a Defence ETF fits with your wider portfolio. But if you see defence spending continuing to rise, these ETFs provide a straightforward, low cost way to back that view.
With InvestEngine’s commission free trading and flexible accounts, adding Defence ETFs has never been easier.
Important information
Capital at risk. The value of your investments may go down as well as up, and you may get back less than you invest.
ETF costs apply. If in doubt, you may wish to consult a professional adviser for guidance.
Tax treatment depends on your personal circumstances and may change in future. This article is for general information only and does not constitute financial advice.