Global X Defence Tech ETF reported a $13.84 million loss for the year ended 30 June 2026, reversing a $7.50 million profit a year earlier. The result was driven by $14.48 million in net losses on investments and foreign exchange, even as investor applications lifted net assets to $112.56 million.
- $13.84 million annual loss, versus $7.50 million profit
- $14.48 million net fair-value and foreign-exchange loss
- Net assets rose to $112.56 million on strong applications
- $3.61 million distribution declared for unitholders
- Ernst & Young issued an unmodified audit opinion
Global X Defence Tech ETF (ASX:DTEC) has swung from profit to a $13.84 million loss as falling portfolio values and foreign-exchange movements overwhelmed investment income. The loss compares with a $7.50 million profit in the prior year, according to the fund’s annual financial report for the year ended 30 June 2026.
The deterioration was overwhelmingly market-driven rather than a sign of rising fund expenses. Net losses on financial instruments at fair value through profit or loss, including foreign-exchange effects, reached $14.48 million, comprising an $18.19 million unrealised loss partly offset by $3.70 million in realised gains. Dividend and distribution income increased to $642,000 from $112,000, while operating expenses fell to $18,000 from $86,000.
Portfolio Losses Drive Annual Result
DTEC is an Australian feeder fund whose assets are invested substantially in the Global X Defense Tech ETF (SHLD), which seeks to track the Global X Defense Tech Index. Its investment portfolio was valued at $115.70 million at 30 June, representing 99.69% of total assets and making investment valuation the key audit matter identified by Ernst & Young.
The report shows how sharply the fund’s exposure has expanded. Listed investments rose from $60.32 million to $115.70 million during the year, while the fund’s sensitivity analysis indicated that a 10% movement in portfolio prices would have changed net assets by approximately $11.57 million. A 10% movement in the disclosed currency exposure would have had an estimated $11.60 million effect. Those are sensitivities, not forecasts, but they underline the concentration of the result in market prices and the Australian dollar value of mostly US-dollar assets.
Applications Lift Assets Despite Negative Return
Net assets attributable to unitholders nevertheless increased to $112.56 million from $60.43 million. Applications contributed $79.87 million, against $10.30 million in redemptions, and the number of units on issue rose to 7.5 million from 3.7 million. In other words, fresh investor money more than offset the year’s investment loss in the fund’s balance sheet.
DTEC also declared distributions of $3.61 million, including $3.51 million payable at year-end, with the June distribution paid to entitled unitholders on 16 July 2026. The distribution does not change the underlying market loss, but it does help explain why cash and distributions payable appear alongside a much larger investment portfolio at reporting date.
Audit Finds No Qualification
Ernst & Young issued an unmodified audit opinion and reported no contraventions of auditor independence requirements. The audit focused on confirming investment holdings and cash, assessing portfolio prices against independent market data, and reviewing the related fair-value disclosures. All of the fund’s fair-value investments were classified as Level 1 assets, meaning they were based on quoted prices in active markets.
The next useful datapoint is not another accounting explanation but the fund’s subsequent net asset value and portfolio performance. The annual report records no change to DTEC’s investment strategy after 30 June, leaving the fund exposed to the same combination of defence-sector share prices, US-dollar movements and investor flows that produced such a wide gap between its first-year profit and second-year loss.
Bottom Line?
DTEC attracted substantial new capital, but the latest accounts show that investor inflows did not protect unitholders from a sharp market-value loss.
Questions in the middle?
- Did the defence technology portfolio recover after 30 June 2026, or did unrealised losses continue into the new financial year?
- How closely did DTEC track the Global X Defense Tech Index and underlying SHLD ETF after fees, expenses and currency movements?
- Will applications continue to outweigh redemptions if the fund’s market-value losses persist?