Betashares has unveiled its latest ETF offering, which provides access to leading global defense companies linked to NATO allies.

The Betashares Global Defense ETF (ASX: ARMR) invests in a portfolio of up to 60 leading companies that derive more than 50 per cent of their revenue from the development and production of military and defense equipment, such as Lockheed Martin, Palantir Technologies and BAE Systems.

It will include companies based in NATO countries and major NATO allies such as Australia, South Korea and Japan.

The ETF marks Betashares' 96th fund to launch on the ASX.

"Due to the changing geopolitical landscape, NATO member nations are increasing spending to levels not seen since the Cold War to improve their defenses," noted Betashares CEO Alex Winokur.

“This underpins strong forecasted earnings and cash flow growth for many companies in ARMR's ​​portfolio.

"Furthermore, additional defense spending has historically supported innovative technological developments with commercial applications."

The fund manager highlighted the significant rise in global spending in response to the increasing sophistication of modern threats and technological advances, with every region of the world experiencing defense spending growth in 2023.

He also notes that NATO countries are looking to strengthen their strategic positions, with many major governments announcing plans for greater spending going forward, particularly across the European continent.

"ARMR is designed as a satellite portfolio exposure that allows investors and their financial advisors to gain focused exposure to the defense and security industry, complementing a well-diversified portfolio of stocks, bonds and other assets," it said.

Last week Global X announced it was bringing its Defense Tech ETF (ASX: DTEC) to Australian shores. The fund, which has been listed on the NYSE Arca since 2023, offers exposure to key sectors driving the future of defense, including AI, drones and cybersecurity.

VanEck previously launched its own hedge ETF (ASX: DFND) in September, which is believed to be the first hedge ETF on the ASX.

At the time, the fund manager's Asia-Pacific chief executive Ariane Neuron noted that the world had sadly changed "since the days of celebrating the peace dividend".

"While countries have been extolling the economic benefits of reduced defense spending, they are increasing military spending," he said.

"Investors are adjusting to the likely reality that this will continue to rise in the coming years."