Why Australia’s richest person just made a $140m bet on defence
Billy Leung
Australia’s richest person, Gina Rinehart, has bought some of the world’s largest defense companies. This may seem like an unusual move for a mining billionaire, but it reflects a broader shift in markets.
Defense has evolved from a geopolitical issue to a global investment theme due to increased uncertainty in government spending, technological advances and global security.
As conflicts continue in Europe and the Middle East and tensions remain high in Asia, governments are dramatically increasing military spending. According to the Stockholm International Peace Research Institute (SPIRI), global military spending will peak at US$2.9 trillion in 2025, marking the 11th consecutive year of growth.
Europe has become an important driving force. The continent’s military spending reached record levels last year. NATO members agreed in June 2025 to raise the alliance’s long-term defense spending target from 2 percent of GDP to 5 percent by 2035.
Bloomberg’s report this month Rinehart reportedly invested almost US$100 million ($140 million) in US arms companies in the first quarter of this year, a story that attracted more readers than the service’s report on its failed attempt to sue Elon Musk, the world’s richest man, and OpenAI’s Sam Altman.
Rinehart’s private company, Hancock Prospecting, disclosed holdings in major US defense contractors including RTX, Northrop Grumman, L3Harris Technologies and Lockheed Martin; It’s an example of a growing recognition among investors that defense has become a long-term opportunity rather than a short-term geopolitical trade.
Modern defense spending no longer focuses solely on traditional military hardware.
Defense is unlike many cyclical industries that depend on consumer demand or business confidence. Revenues largely come from government budgets and multi-year purchasing contracts, providing visibility of earnings even during times of economic uncertainty.
Recent Global X analysis shows that during periods of major global conflict since 2000, defensive stocks in the S&P 500 outperformed the broader index over the next 12 months.
Past performance is never a guarantee of future returns; but this trend highlights how markets have historically responded to sustained increases in defense spending.
One of the things that appeals to investors is that defense spending often extends beyond immediate conflicts. Governments do not simply increase military budgets in times of tension and then quickly reverse course. Supply cycles can span decades, while depleted stocks can take years to replace.
More importantly, the focus on modern defense spending is no longer solely on conventional military hardware. The nature of war is changing.
The conflict in Ukraine has demonstrated how relatively low-cost drones can reshape battlefields and force governments to rethink their procurement priorities. Military budgets are increasingly shifting towards autonomous systems, cybersecurity, artificial intelligence, missile defense and counter-drone technologies.
This evolution creates opportunities not only for long-standing defense contractors, but also for companies interested in advanced software, sensors, robotics and next-generation communications.
This technological shift is one reason why investors are turning to defensive stocks more broadly, not just those that previously focused on technology or industrial innovation. Many of the companies benefiting from increased defense spending are now at the intersection of artificial intelligence, semiconductors, communications infrastructure, and aerospace engineering.
Global X estimates that defense spending could exceed $3.6 trillion by 2030 as countries replenish depleted stocks and continue to modernize. Defense spending in the United States alone is expected to approach $1 trillion in fiscal year 2026, driven in part by additional financing packages and increasing strategic competition with China.
In Australia, AUKUS-affiliated programs, naval modernization and advanced missile capabilities point to sustainable defense investments over the next decade.
Australia’s defense industry is smaller than that of the US and Europe, but is increasingly linked to global supply chains and technology partnerships.
Billy Leung is senior investment strategist at Global X ETFs.
- The advice given in this article is general in nature and is not intended to influence readers’ decisions about investments or financial products. They should always seek their own professional advice, taking into account their personal circumstances, before making any financial decisions.
Expert tips on saving, investing and making the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.
