The companies bringing investors closer to the next frontier of global security

On Friday 12 September 2025, ARMR had a semi-annual rebalance introducing ten new securities and broadening the portfolio’s geographical footprint to now include ASX-listed companies.

As a reminder, ARMR holds global companies headquartered in NATO member and major NATO ally countries (such as Australia, Japan, and South Korea) which derive more than 50% of their revenues from the development and manufacturing of military and defence equipment, as well as defence technology.

This semi-annual rebalance saw the following adds and deletions from the portfolio.

Source: Betashares. As at 12 September 2025.

Broadening ARMR’s reach

We highlight three of the most significant additions*:

• Hyundai Rotem — delivering armoured capability to NATO’s eastern flank.
• Karman Holdings — advancing missile defence and space systems.
• DroneShield — counter-drone warfare, addressing one of the fastest-emerging threats.

Collectively, these companies extend ARMR’s exposure to the next frontier of global security.

Hyundai Rotem: Armour on NATO’s Frontline

Although South Korea is not a NATO member, it is among the alliance’s closest partners, and its defence exports are reshaping Europe’s land-combat capabilities. Hyundai Rotem’s K2 Black Panther tanks are entering service in Poland under a contract valued at USD$6.5 billion (signed August 2025), one of the decade’s largest land-systems agreements¹. Production will be shared between Korea and Poland, deepening industrial cooperation while strengthening NATO’s eastern defences.

Hyundai Rotem is further enhancing its platforms with Rafael’s Trophy Active Protection Systems, equipping NATO-aligned forces with some of the world’s most advanced survivability technology. With its portfolio of armoured vehicles, power systems, and engineering solutions, Hyundai Rotem brings substantial land-power exposure to ARMR, balancing the portfolio’s existing aerospace-oriented holdings.

Karman Holdings: Missile Defence and Space

In the United States, investment in missile defence and space resilience is accelerating. Karman Holdings, which listed earlier this year, has rapidly established itself as a key enabler within this ecosystem.

The company manufactures mission-critical structures and propulsion hardware that underpin more than 100 missile defence and space programs. Its components are deployed across the US Department of Defence, NASA, and leading contractors including Blue Origin, ULA and SpaceX/Starlink.

In Q2 2025, Karman reported 35% year-on-year revenue growth, a record backlog of $719 million, and upgraded full-year guidance². As NATO and NATO allies expand investments in missile defence and orbital assets, Karman provides ARMR with exposure to a growth vector at the intersection of deterrence and space.

DroneShield: Countering the Drone Threat

Australia’s DroneShield is one of the few pure-play listed companies globally dedicated to this domain, and it is scaling rapidly. In 2025, it secured a record AUD$61.6 million contract with a European military reseller, in addition to follow-on R&D funding from a Five Eyes partner³.

Its flagship solutions — the DroneGun Mk4 and DroneSentry systems — are already deployed with US, NATO, and Australian forces, providing a first line of defence against low-cost drones capable of inflicting disproportionate damage. Through DroneShield, ARMR offers investors direct exposure to one of the most dynamic segments of modern conflict.

Why was the recent rebalance significant

The addition of Hyundai Rotem, Karman Holdings, and DroneShield defines ARMR’s unique position in the defence ETF landscape.

• More pure-play focus: ARMR’s inclusion of DroneShield pushes it further into specialist, defence-only companies.
• Momentum & differentiation: ARMR’s line-up is being reinforced by 2025’s standout contracts — Hyundai Rotem’s Poland tank program, Karman’s swelling missile/space backlog, and DroneShield’s record European order. This tilts ARMR toward contract-driven growth in frontline defence platforms and emerging domains.

• ARMR’s index currently holds all of the top 20 defence contractors in the world by defence revenue, headquartered in NATO-aligned countries, including Lockheed Martin, BAE Systems, Rheinmetall, RTX and Thales^xx.  
• These companies are expected to be some of the largest beneficiaries of governments implementing the 5% GDP defence spending commitment. 
• ARMR has returned 62.85% since its inception on 2 October 2024 (as at 29 August 2025), and ARMR’s index (net of fees) has returned 28.8% p.a. over the past 5 years (past performance is not an indicator of future performance of any index or ETF)*.

*ARMR’s index is the VettaFi Global Defence Leaders Index. Index performance is net of ARMR’s management fee of 0.55% p.a. You cannot invest directly in an index.

Sources:

1. https://www.overtdefense.com/2025/08/08/poland-signs-6-5-billion-contract-with-hyundai-rotem-for-180-k2-tanks/?utm_source=chatgpt.com ↑

2. Karman Space & Defense’s Q2 2025 earnings report, August 7, 2025. ↑

3. https://www.droneshield.com/media/press-releases/droneshield-receives-all-time-record-61-6-million-european-counterdrone-military-contract; https://announcements.asx.com.au/asxpdf/20250708/pdf/06lljxg48kp5z7.pdf. ↑