5 Best ETFs of H1 2025: Defense & Gold Miners Lead

The first half of 2025 brought a clear message: Geopolitical tension and economic uncertainty are reshaping investor behavior. Defense ETFs soared on fears of Russian aggression and NATO instability, while gold miners surged amid rising inflation and government spending concerns.

Here’s a look at the best ETFs of the first half of 2025, as measured by performance through June 30, which were dominated by exchange-traded funds focused on either European aerospace and defense stocks or gold-mining equities.  

Their performance provides a snapshot that tells a broader story of global risk reallocation and safe‑haven demand.

What EUAD and GDMN Tell Us About Market Shifts

The top-performing ETF for the first half of 2025 is the Select STOXX Europe Aerospace & Defense ETF (EUAD), pushed higher by Europe’s defense offensive, which owes much to mounting threats from Russia and waning trust in U.S. NATO support. Germany’s 5% GDP defense commitment and broader spending bumps have driven EUAD’s phenomenal rally, up nearly 78% year to date, signaling a coordinated regional security response.

Gold miners have also flourished as inflation fears and out‑of‑control fiscal spending loomed large. The WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN) was the best‑performing gold equity ETF during the first quarter and second-best performer overall, rising more than 75% by addressing both bullion gains and miner leverage.  

Together, these ETFs illustrate a dual market narrative: defense as a reaction to geopolitical risk and gold miners as insurance against inflation and fiscal recklessness.

2025 Top 5 Performers: A Closer Look

Here’s a breakdown of each of the top-performing ETFs' focus, assets, expense ratios and first-half return.

EUAD: Select STOXX Europe Aerospace & Defense ETF

• Focus: EUAD provides pure-play European defense stocks.
• AUM: $1 billion
• Expense Ratio: 0.5%
• H1 2025 Performance: 77.8%

GDMN: WisdomTree Efficient Gold Plus Gold Miners Strategy Fund

• Focus: GDMN combines gold miners with gold futures cycles.
• AUM: $36.4 million
• Expense Ratio: 0.45%
• H1 2025 Performance: 75.2%

SGDM: Sprott Gold Miners ETF

• Focus: SGDM offers diversified global gold-mining exposure.
• AUM: $397.6 million
• Expense Ratio: 0.5%
• H1 2025 Performance: 62.1%

AUMI: Themes Gold Miners ETF

• Focus: AUMI provides active exposure to global gold mining firms.
• AUM: $9.7 million
• Expense Ratio: 0.35%
• H1 2025 Performance: 60.1%

SHLD: SPDR European Shield ETF

• Focus: SHLD offers broader defense/security exposures, including cyber and drones.
• AUM: $2.9 billion
• Expense Ratio: 0.5%
• H1 2025 Performance: 60.4%

Can These ETFs Outperform Through H2 2025?

Looking ahead, momentum may persist if defense budgets remain strong and inflation concerns carry into year’s end. But the continuation of these trends depends on several pivotal questions:

• Will European defense spending remain at or climb above 5% of GDP? Or could diplomatic de‑escalation cool investor sentiment?
• Will inflation and fiscal deficits stay elevated, supporting precious metal demand, or will renewed fears of rate hikes undercut gold and miners?
• Could rotations into broader markets reduce ETF inflows and compress returns across these sectors?

If geopolitical and macroeconomic pressures remain high, defense and gold‑mining ETFs may continue outperforming. But a shift toward stability or tighter monetary policy could reverse this leadership quickly.

Final Thoughts on H1 Top-Performers

The top-performing ETFs of the first half of 2025 reflect a market that is risk-aware and inflation-conscious, seeking both security and inflation hedges in one package. For ETF investors, they offer strategic exposure to unique macro themes.

That said, risk and sector concentration are real. Defense spending growth is priced in and not guaranteed to expand further, and gold miners can suffer sharp reversals. As 2025 enters its second half, the smartest approach may be to balance conviction with caution, holding these high-momentum ETFs while ensuring portfolio diversification and flexibility.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in ETFs involves risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions.

At the time of publication, Kent Thune did not hold a position in any of the aforementioned securities.