Defense stocks are back in the spotlight as global military spending rises and geopolitical risks remain high. For investors who want exposure without picking individual stocks, defense-focused ETFs provide a diversified option in 2026. Using TipRanks’ Best Defense ETFs tool, we’ve identified three ETFs with low expense ratios and strong returns last year.
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For context, a defense ETF (exchange-traded fund) invests in companies connected to the defense and military sector. These funds typically include firms that manufacture weapons, aircraft, missiles, and other military equipment.
Let’s look at the details.
ARK Space Exploration & Innovation ETF (ARKX)
The ARK Space Exploration & Innovation ETF is built to give investors exposure to the fast-growing space industry. Run by Cathie Wood’s ARK Invest, the fund focuses on innovative companies that could play a major role in how space is explored and used in the future. The fund has an expense ratio of 0.75%.
ARKX holds 34 stocks totaling $1.07 billion in assets, with the top 10 holdings making up 63.35% of the fund. Key Holdings include Rocket Lab (RKLB), L3Harris Technologies (LHX), and Kratos Defense & Security (KTOS).
Looking ahead, according to TipRanks’ unique ETF analyst consensus, determined based on a weighted average of analyst ratings on its holdings, ARKX is a Moderate Buy. Currently, ARKX’s top three holdings with the highest upside potential are Strata Critical Medical (SRTA) at 94%, Archer Aviation (ACHR) at 54%, and JD Logistics (HK:2618) at 43%.
Invesco Aerospace & Defense ETF (PPA)
The Invesco Aerospace & Defense ETF gives investors exposure to companies in the aerospace and defense sector. It focuses on firms involved in aircraft, defense systems, and space technology, offering a way to invest in the industry’s growth and innovation.
PPA has an expense ratio of 0.58%. In terms of holdings, the fund includes top names like Boeing (BA), RTX Corporation (RTX), and Lockheed Martin (LMT). PPA holds 61 stocks with total assets worth $7.90 billion.
Looking ahead, according to TipRanks’ unique ETF analyst consensus, determined based on a weighted average of analyst ratings on its holdings, PPA is a Moderate Buy. The top two holdings with the highest upside potential are Airo group (AIRO) at 72% and Axon Enterprise (AXON) at 32%.
Select STOXX Europe Aerospace & Defense ETF (EUAD)
The EU Aerospace & Defense ETF invests in European companies in the aerospace, defense, and security sectors. It offers exposure to firms developing aircraft, defense systems, and related technologies, giving investors a way to tap into the region’s defense and aerospace growth. EUAD has an expense ratio of 0.50%.
Meanwhile, the fund holds around 14 stocks with assets worth $1.41 billion. Key names include Airbus (EADSY), Rheinmetall Ag (RNMBY), and Rolls- Royce Holdings (RYCEY).