πππOn April 7, US President Donald Trump said that he had approved a defense budget of USD 1 Trillion. This is the biggest budget the US Government has ever allocated for its military. Afterwards Defense Secretary Pete Hegseth also confirmed it on X "Coming soon: the first Trillion Dollar Dept of Defense Budget".
SHLD $Global X Defense Tech ETF(SHLD)$ seeks to invest in companies positioned to benefit from increased adoption and utilisation of Defense technology. This includes companies that build and manage cybersecurity systems, utilise AI and big data as well as build advance military systems and hardware such as robotics, fuel systems and aircraft for defense applications.
SHLD has recently reached its 52 week high at USD 51.42. Its share price has been on a tear as it is up 34.6% year todate and in 2024 it has jumped by 53%. In contrast $SPDR S&P 500 ETF Trust(SPY)$
The Top 10 holdings include Rheinmetall AG, Palantir, RTX Corp, Northrup Grumman, Thales SA, General Dynamics, Lockheed Martin, Leonardo SPA, Hanwha Aerospace and BAE Systems.
The weightage of the Top 10 holdings is 70%. Total number of holdings is 37. The expense ratio is 0.50%. SHLD pays dividends every 6 months. It will go ex dividend on June 27 2025. The current dividend yield is 0.61%.
Rheinmetall is the Top holding. It is a German technology group specialising in both Defense and Civilian Technologies with a focus on security and mobility. It also has a significant presence in the automotive industry with components like engine parts and solutions for e-mobility and digitalisation.
In March, the German parliament passed a major defense and infrastructure spending plan worth up to 1 Trillion Euros. Rheinmetall is set to benefit from this increased spending on the military.
Palantir $Palantir Technologies Inc.(PLTR)$
NATO has reported that it completed the acquisition of Palantir's Maven Smart Systems at the end of March. This will enable NATO to collect and analyse data to prioritise best targets used in warfare.
Palantir's share price has been on a strong uptrend as it is up 13.8% in the past week and 43% year todate. In 2024 Palantir has skyrocketed a huge 399%. With the increase in US Defense spending, Palantir is set to benefit immensely.
RTX Corp $RTX Corp(RTX)$ is an American multinational Aerospace and Defense company that designs, manufactures and sells various systems for commercial, military and government customers.
RTX share price is up 5.1% year todate and in 2024 it has risen 20.7%.
These are just the Top 3 holdings of SHLD. It is not surprising that SHLD is currently on a strong upward momentum.
Wall Street Analysts are bullish on SHLD with a Buy rating, Average Target price of USD 57.10 according to Tipranks, an upside potential of 13%.
With geopolitical conflicts and tensions, heightened global uncertainties, central governments around the world may boost defense budgets, benefiting companies in this sector.
In addition to that, modernisation and innovation with advancements in defense technology such as Cybersecurity, Aerospace Innovations, Unmanned Systems can drive growth among SHLD's holdings.
Global military spending reached USD 2.46 trillion on 2024, an all time high. It is expected to continue increasing in 2025.
With the geopolitical conflicts in the Middle East and Ukraine, I believe that SHLD has lots of exponential growth ahead. SHLD is a low cost way to get into the fast growing and bbest defense companies globally.
$Global X Defense Tech ETF(SHLD)$ - maximum power at minimum cost! That is my favourite way of investing!πππππππ°π°π°
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