Global X Defense Tech ETF (SHLD -0.95%) debuted in September 2023, almost uncanny timing for an exchange-traded fund (ETF) focused on defense stocks.
Just a year earlier, Russia had invaded Ukraine. Then, only weeks after this defense tech ETF launched, Hamas militants attacked Israel on October 7, 2023, triggering a full-scale war. Fast forward to 2025, and that conflict has escalated to include Iran, with the U.S. now conducting surgical strikes on nuclear infrastructure and Israel targeting high-ranking regime members.
Against this backdrop of geopolitical instability, this Global X ETF has delivered performance that not only surpassed the S&P 500 but also outpaced several rival aerospace and defense ETFs.
But what exactly is driving that outperformance, and more importantly, is this ETF right for your portfolio? Here’s what you need to know before investing.
What is the Global X Defense Tech ETF?
Global X Defense Tech ETF (SHLD) is a thematic ETF that passively tracks the in-house Global X Defense Tech index. Unlike most ETFs that license benchmarks from major index providers, this ETF’s underlying index is proprietary, developed directly by Global X ETFs.
The ETF currently holds 42 large-cap companies that span a broad spectrum of modern defense capabilities. What sets this ETF apart from traditional aerospace and defense ETFs are three key distinctions:
- It places less emphasis on pure-play aerospace manufacturers and component distributors.
- The fund looks beyond U.S.-based contractors, with significant exposure to European defense firms.
- It broadens the scope to include nontraditional defense players such as cybersecurity and intelligence-focused companies.
Exchange-Traded Fund (ETF)
How to buy Global X Defense Tech ETF (SHLD)
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the ETF: Enter the ticker or ETF name into the search bar to bring up the ETF's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Holdings of Global X Defense Tech ETF (SHLD)
Global X Defense Tech ETF held 42 companies in mid-2025, with approximately 86.5% of the portfolio allocated to the industrials sector and 13.5% to information technology.
Geographically, 55.2% of holdings were based in the United States, followed by 10.8% in Britain, 9.5% in Germany, 6.8% in South Korea, 5.7% in France, 4.4% in Italy, 4.1% in Sweden, and 2.5% in Israel.
Here are its top 10 holdings:
- Rheinmetall (RNMBY -0.76%) – 8.00%
- RTX (RTX +2.84%) – 7.83%
- BAE Systems (OTC:BAES.F) – 7.83%
- Palantir Technologies (PLTR -3.35%) – 7.75%
- Lockheed Martin (LMT -0.48%) – 7.69%
- General Dynamics (GD -0.74%) – 4.70%
- L3Harris Technologies (LHX -1.14%) – 4.57%
- Leidos Holdings (LDOS -2.43%) – 4.53%
- Northrop Grumman (NOC -0.57%) – 4.49%
- Thales (OTC:THLE.F) – 4.48%
Should I invest in Global X Defense Tech ETF (SHLD)?
Global X Defense Tech ETF is best suited for investors looking to tactically overweight defense stocks based on the view that geopolitical conflicts will continue to escalate, and defense budgets will remain elevated or rise beyond already anticipated levels.
As of July 2025, this ETF's portfolio appeared potentially overvalued, with the average holding trading at 27.49 times earnings and 4.85 times book value.
That said, for those comfortable with these stretched valuations, this Global X ETF offers a unique alternative to traditional aerospace and defense ETFs.
It provides greater European exposure, a lower weighting to aerospace manufacturers, and allocations to cybersecurity and intelligence-related firms.
Does Global X Defense Tech ETF (SHLD) pay a dividend?
Yes, Global X Defense Tech ETF pays a dividend. In mid-2025, it had a 30-day SEC yield of 0.3% and distributes income on a semiannual basis.
What is Global X Defense Tech ETF's expense ratio?
Global X Defense Tech ETF carries an expense ratio of 0.50%. While higher than broad-market index ETFs, this is reasonable for a niche thematic strategy. It translates to about $50 annually in fee drag on every $10,000 invested. These fees are deducted at the fund level and reduce overall performance, rather than being billed directly to you.
Expense Ratio
Historical performance of Global X Defense Tech ETF (SHLD)
1-Year | Since Inception | |
|---|---|---|
Net Asset Value | 82.43% | 64.01% |
Market Price | 82.89% | 64.47% |
Related investing articles
The bottom line on Global X Defense Tech ETF (SHLD)
Global X Defense Tech ETF is unique and timely for investors seeking targeted exposure to the modern defense sector. With holdings spanning traditional contractors, European manufacturers, and cybersecurity firms, it goes well beyond the typical U.S.-centric aerospace ETF. Its strong performance since launch reflects rising global conflict and investor appetite for defense spending plays. While valuations are on the high side and income is minimal, Global X Defense Tech ETF remains a viable tactical tool for those betting on elevated geopolitical risk.
