For many investors, the world of Exchange Traded Funds (ETFs) on the Australian Securities Exchange (ASX) often revolves around straightforward index-tracking options. While these broad-market ETFs have served as the cornerstone of many portfolios, a shift in strategy for 2026 is on the horizon. The allure of thematic and sector-specific ETFs, particularly those poised for significant, long-term growth, is becoming increasingly compelling.
While some market sectors, such as commodities, are inherently cyclical and prone to boom-and-bust cycles, others appear to be experiencing sustained tailwinds. These are the areas where the potential for multi-year growth is high, with few immediate obstacles in sight. It is precisely these kinds of ASX ETFs that are drawing attention for potential additions to investment portfolios in the coming year.
With this forward-looking perspective, let’s delve into two specific ASX ETFs that appear to fit this favourable profile and are shaping up as strong contenders for investment in 2026 and beyond.
Emerging Opportunities: Two Thematic ASX ETFs to Consider
1. BetaShares Global Cybersecurity ETF (ASX: HACK)
The BetaShares Global Cybersecurity ETF, ticker HACK, lives up to its name by providing Australian investors with exposure to a diversified global collection of companies at the forefront of the cybersecurity industry.
In an era where an ever-increasing volume of governmental, business, and personal interactions are conducted online, the benefits of digital connectivity are undeniable. However, this digital migration also introduces significant vulnerabilities. The consequences of these vulnerabilities being exploited can be severe, impacting individuals, businesses, and governments alike. Consequently, there is a growing and substantial willingness to invest heavily in robust security measures. This trend is a significant positive for all companies operating within the cybersecurity ecosystem, and by extension, for an ETF like HACK.
The performance of HACK units in recent years serves as a tangible indicator of this trend. As of 31 January 2026, this ASX ETF has delivered an impressive average annual return of 15.86% since its inception in 2016. This consistent growth highlights the sustained demand for cybersecurity solutions.
Among the prominent holdings within the HACK ETF are global leaders such as Cisco Systems, Palo Alto Networks, Broadcom, and Cloudflare. These companies are integral to building and maintaining secure digital infrastructure. The ETF does come with an annual management fee of 0.67%, which is a factor to consider when evaluating its overall cost-effectiveness.
2. Global X Defence Tech ETF (ASX: DTEC)
Shifting focus to a different, yet equally pertinent, thematic area, we turn our attention to the Global X Defence Tech ETF, identified by the ASX code DTEC. It is a stark reality that the global geopolitical landscape has become increasingly complex and volatile in recent years. Many nations are reassessing long-standing alliances and adopting more independent strategies to navigate regional threats. While this may contribute to a less predictable and potentially more dangerous world, prudent investment strategies require looking at the direction the world is heading, rather than dwelling on how we might wish it to be.
This is precisely why the DTEC ETF presents itself as a compelling investment opportunity in the current global climate. DTEC invests in a portfolio of international companies that are leaders in the development and provision of defence technologies, weaponry, and related goods and services. Although the ETF only commenced trading on the ASX in September of the previous year, its units have already witnessed remarkable growth, posting a return of over 67% as of 31 January 2026. This rapid ascent underscores the significant capital flows into the defence sector.
Key underlying positions within the Global X Defence Tech ETF include industry giants like Lockheed Martin, RTX Corp, Rheinmetall, and Palantir Technologies. These companies are at the cutting edge of defence innovation. The Global X Defence Tech ETF has an annual management fee of 0.5%, which is relatively competitive for a sector-specific ETF.
Navigating Thematic Investments
Investing in thematic ETFs like HACK and DTEC offers a way to gain targeted exposure to powerful long-term trends. However, it’s crucial to conduct thorough research and understand the specific risks associated with each theme. The cybersecurity sector, while experiencing robust growth, is subject to rapid technological advancements and evolving threat landscapes. Similarly, the defence sector is influenced by geopolitical developments, government spending policies, and international relations.
For investors looking to diversify beyond traditional index funds and potentially capture significant growth from these evolving global trends, the BetaShares Global Cybersecurity ETF and the Global X Defence Tech ETF present themselves as noteworthy options to consider for their ASX portfolios in 2026. As always, consulting with a financial advisor and conducting your own due diligence is recommended before making any investment decisions.
