The level of conflict has steadily been increasing across the world for the past few years but it seems to be building to a head of recent. With a leader of the free world as unpredictable as President Donald Trump, it is certainly a justified fear.
In May of 2025, our Director and Private Wealth Adviser Joshua Barker gave his views on the global macroeconomic views in AusBiz’s segment where he was asked ‘3 Stocks For…’ and given the outlook he chose ‘3 Stocks For… a World in Conflict’.
The 3 Stocks were Australian-focused being DroneShield (DRO.ASX), Austal (ASB.ASX), and Electro Optic Systems (ASB.ASX).
Since then, being the 29th of May 2025, the stocks have performed +266% (DRO), +45% (ASB), +513% (EOS) as at the close of trading 22 January 2026.
DRO.AX
DroneShield Limited
ASB.AX
Austal Ltd
EOS.AX
Electro Optic Systems Holdings Ltd
Past performance, is not a reliable indicator of future performance.
Looking ahead, world government spending on defense is expected to continue at record levels, especially in Europe.
Global defence budgets are no longer cyclical, they are structurally higher.
Inflation-Resilient and Recession-Resistant Demand
Unlike many sectors, defence spending is:
- Policy-driven, not consumer-driven
- Prioritised even during fiscal tightening
- Typically indexed or renegotiated for cost pressures
Geographically diversified…holdings in the UK, Germany, Sweden.
Median market cap of around $20B.
Holdings such as Lockheed and also Tech-heavy Palantir.
Palantir
A defence-focused data analytics and AI software company. Provides intelligence, battlefield analytics, and decision-support platforms used by military, intelligence agencies, and governments. Represents the software and AI layer of modern warfare.
Learn more about the specific holdings and breakdown of DTEC directly from the ETF provider, Global X, here:
https://www.globalxetfs.com.au/funds/dtec
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Disclaimer:
This commentary is intended for general information only and does not constitute personal financial advice. You should consider your own objectives, financial situation, and needs before making any investment decisions.