The VanEck Defense Etf

Today we are not going to look at a single share, but take a look in a completely different direction. Into the defense sector.

Of course, the most well-known Etf in this sector, the VanEck Defense UCITS Etf, has caught my eye. Its annual performance is around 50%, and it has already posted a return of around 15% this year.

So today we want to take a closer look at what it really contains and whether an investment would be worthwhile, purely on the basis of the fundamental data.

$DFEN (-2,45%)

The fund volume currently amounts to €7.278 billion with annual costs of 0.55%. The Etf is an accumulating fund.

Company distribution:

Palantir Technologies 8% $PLTR (-3,46%)

RTX Corporation 8% $RTX (-1,33%)

Thales 7% $HO (-3,46%)

Leonardo- Finmeccania 7% $LDO (-3,78%)

Hanwha Aerospace Co Ltd ORD 6% $012450

Elbit Systems 6% $ESLT (-0,44%)

Saab 6% $SAAB B (-1,53%)

Curtiss Wright 5% $CW (-0,76%)

Leidos 4% $LDOS (-1,49%)

=57%

The remaining 43% is distributed in smaller shares among other companies, such as Planet Labs $PL (+1,69%) (approx. 2%) or Ondas $ONDS (-0,57%) (1%).

Country distribution:

USA 49%

South Korea 11%

Europe 30%

Israel 7%

Singapore 3%

1 Palantir Technologies (USA)

Conclusion: Palantir is not a normal stock

Palantir has developed impressively from a speculative bet to a fundamental force in the S&P 500. The company is more profitable than ever before: massive profit and sales growth meets software margins that are unparalleled in the industry.

But quality has its price on the stock market: this success has already been fully recognized and priced in by the market. With a current P/E ratio of almost 300, the share is extremely expensive and leaves little room for disappointment. Palantir is therefore a highly profitable, exceptional company, but its valuation already anticipates the perfection of the coming years.

This can also be clearly seen in the analysts' estimates: some say there is still plenty of room for improvement with a price target that is almost twice as high, while others say the fair value is half the current price.

That's why I personally can't really get on board with Palantir. The share as a whole is not a buy for me at the moment.

2. RTX corporation(USA)

Conclusion: RTX - The operational bulwark

RTX (formerly Raytheon) is the definition of stability and predictability in April 2026. With a gigantic order backlog of USD 268 billion, the business is secured for years to come. The company has solved the technical problems of the past and is now converting its dominant position in aerospace and defense into record-breaking cash flows.

While Palantir thrives on the AI fantasy, RTX delivers the physical reality: a moderate P/E ratio of around 36 compared to Palantir, rising dividends and a fundamental safety that is rare in the current market environment. It is not a speculative high-flyer, but a highly profitable basic investment for the security age.

However, perfection is priced in here with very high valuation premiums, so I am also skeptical.

3. thales (France)

Conclusion: Thales - the European "all-rounder"

Thales established itself as the technological backbone of European defense and digital infrastructure in April 2026. With a record order backlog of over EUR 53 billion, the company offers "visibility" for production that extends well beyond 2028.

- Financial performance: 2025 closed with sales of EUR 22.1 billion (+9% organic) and record cash flow. The target for 2026 is clearly defined: A jump in sales to up to EUR 23.6 billion with an improved EBIT margin of around 12.7 %.

- Strategic breadth: Unlike pure defense companies, Thales benefits from three engines simultaneously:

Defense: massive growth through the modernization of European armies.

Aerospace: The recovery in civil aviation is driving demand for avionics.

Cyber & Digital: Through the integration of Imperva, Thales is now one of the world's largest players in the field of data security - a market that is growing completely independently of military budgets.

With a Kgv of 29, we find the most favorably valued company to date.

4 Leonardo Finmenncania (Italy)

Conclusion: Leonardo - the efficiency champion

Leonardo is the "value tip" among the large defense stocks in April 2026. While competitors such as Rheinmetall or Palantir often struggle with extremely high valuations, Leonardo has done its homework in terms of profitability and is now benefiting massively from the European arms race.

- Financial turnaround: Leonardo has beaten all expectations with its figures for 2025. Sales rose to EUR 19.5 billion (+11%), while operating profit (EBITA) increased by a strong 18%. Particularly impressive: net debt was almost halved, giving the Group massive scope for new investments.

- Strategic focus: Under the new industrial plan (2026-2030), Leonardo is fully committed to digitalization and cyber security. With the "Michelangelo" project (an AI-supported air defense system), Leonardo occupies a lucrative niche in the NATO security architecture.

- Valuation as a trump card: Despite a share price rally of almost 190% since 2024, the share is still "reasonably" valued compared to the sector with a forward P/E ratio of around 27. It is significantly cheaper than many US rivals, although Leonardo has similar growth rates for incoming orders (+15%).

We have now briefly analyzed the 4 largest companies in this ETF, which account for around 30%.

How do you rate these companies? Please take a look at the other companies that have not been presented here.

And of course, are you invested in the etf or do you intend to be?

Would it be an investment case for you or do you think the defense sector is largely overvalued?

@Raketentoni
@Tenbagger2024
@Get_Rich_or_Die_Tryin
@Multibagger etc. ....

Tenbagger2024@Tenbagger2024

I am not an ETF investor myself. But last year I always explicitly pointed out the high Palantir positions in the US defense ETFs to the USER. And rather recommended the European Defense ETF. I was probably a little right about Palantir. However, I now find the US Defense ETF attractive due to the new starting position. By the way, I think your approach of analyzing the large positions in the ETF individually is very good and also very advisable. Even if ETF investors tend to look for the less labor-intensive option. I expect good figures for RTX in May due to the high demand for Patriot. Incidentally, I see a P/E ratio of 122 in the chart for Palantir, which should actually be correct. So far, I have tended to be an opponent of Palantir due to its high valuation. However, if the share falls a little further, I will also consider buying in

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capital_captain_2693@capital_captain_2693

@Tenbagger2024 Thank you for your assessment. You're actually right about Palantir, I was still in 2025, when the Kgv was still almost 300.
I don't think the Etf is a bad addition and you reduce the risk a little if you diversify more broadly.

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@capital_captain_2693 I agree. As already written, the risk was a little too great for me due to the large palantir share. But if you want to invest in palantir anyway, it would be a good way of minimizing risk

investment_sage_bpszl@investment_sage_bpszl

50Min

@Tenbagger2024 What other defense stocks do you have in your portfolio? But all the stocks presented here are trading at very high multiples. I'm not sure whether there's still so much room for improvement

45Min

@investment_sage_bpszl I always had armor values in my company ideas. The last one was L3HARIES . I myself have more shovel suppliers for the defense industry in my portfolio.

42Min

@Tenbagger2024 and what do you think of the values in the Defense Etf?
But the one you gave me is of course also a good option

36Min

@investment_sage_bpszl I'm not quite the expert when it comes to ETFs. But the companies in the large positions are already robust

TradingHase@TradingHase

Great presentation. I like the fact that you take another look at the ETF's main stocks individually. 👍🏼

@TradingHase Thank you very much! What is your assessment of the Etf

pivot_code@pivot_code

Thanks for the contribution and the effort. I am actually invested and convinced. Hadn't realized that Palantir is now the largest position. (still at 4.9% at the end of 2025)

Echsenkönig A.@Bezehgombjuderstimme

I am invested in both the and the Europe Defense. The Van Eck makes up just under 3% of my portfolio. I see these themed ETFs as a small gamble. Let's see how long it does well. So far, this is my best-performing etf 🙂

@Bezehgombjuderstimme Sorry, I made a mistake with the Future of Defense Etf from Van Eck 😂 But they are also almost all called the same thing

@Bezehgombjuderstimme yes, I had also seen it as a small admixture

@WarrenamBuffet @Klein-Anleger What do you think about this?

SanSebastian@WarrenamBuffet

@investment_sage_bpszl Defense or armor is not my sector at all

@WarrenamBuffet Wieso?

48Min

@WarrenamBuffet and do you generally see the Etf as a sensible addition? I'm considering weighting it at around 5%.

47Min

@capital_captain_2693 I'm not interested at all and many stocks are already included in the ETFs anyway.

@investment_sage_bpszl if you think armor will outperform the global market over the next few years yes

Get_Rich_or_Die_Tryin@Get_Rich_or_Die_Tryin

Not an investment for me, I think a lot of thematic and sector ETFs... distance.😅

But I think the approach with the largest individual positions and a corresponding short analysis is great.👌🏻

I only hold $EXENS and, if you want to count them, $NORBT in my portfolio.

@Get_Rich_or_Die_Tryin understand. I am always cautious when it comes to ETFs.
But how would you generally classify the Etf? I think that a lot is already priced into the price, so I wanted to ask the community here what you think about it