The world is a theater of all events. While there are periods of peace and tranquility, tensions are always lurking, given the differences in ideologies and fights over meager natural resources. Wars and tensions are common, even as world powers and various bodies try to ensure peace. On the other hand, periods of wars and tensions rattle the markets as they force investors to be highly cautious. Similarly, they also give rise to unique investment opportunities with high rewards.Geopolitical TensionsThe escalation of the war in Ukraine as Russia invaded affirmed how any occurrence is usually an event for some investors to make money. Defense contractors have been some of Europe's most significant beneficiaries of the skyrocketing tensions on defense budgets. Likewise, companies making various weapons and artillery crucial to sustaining war have benefited immensely.Likewise, the conflict in the Gaza Strip has triggered geopolitical tensions in the Middle East. The prospect of a full-blown war has only triggered the bolstering of defense budgets as countries look to safeguard their interests. The increase has only translated to increased revenues for defense contractors, with stocks in the aerospace and defense category exploding in recent months.While it can be challenging for an average investor to gain exposure and try to profit from the escalating geopolitical tensions globally, Reelshares Allied Defense Fund is making it possible and easy. As countries bolster their defense budgets and try to protect and safeguard their interests amid the, the Allied Defense Fund offers investors exposure to a basket of defense-related investments in a single place.Soaring Defense BudgetsThe global spending on militaries reached an all-time high in 2022 at $2.24 trillion as the Russia-Ukraine war caused countries to spend big to protect their interests. The US remains the world's largest military spender, spending over $800 billion in 2022, accounting for about 40% of global military spending. The high spending is attributed to, among other things, its financial aid to UkraineIn Europe, defense spending is rising for the ninth consecutive year, reaching record highs of €240 billion in 2022. 20 of the 27 European Union members have increased their defense expenditure, with six spending over 10% in response to the Russian invasion of Ukraine. Most investments have gone towards procuring new equipment, up over 7%. The increase in defense spending comes as European defense forces seek to be much more ready for the demanding era.The U.S. has been at the forefront of defense spending. Its investment in aerospace and defense firms increased between 2017 and 2020 to $448 Billion. The investments have also increased significantly as the country looks to support the long war in Ukraine. The increased investments are increasingly benefiting contractors in the defense and aerospace sectors, which the Reelshares Allied Defense Funds also invests in.Companies exposed to developing lucrative products needed in a war, like fighter jets, helicopter parts, avionics products, missile guidance systems, and drones, are reaping big. Lockheed Martin, General Dynamics, and Northrup Grumman are publicly traded companies reaping big and offering relatively low downside risk for investors eying exposure in the sector.Russia, indicating that it is poised to spend 6% of its gross domestic product to $349 billion in the military, signals defense spending will exceed social expenditures. What this means is that the war in Ukraine is Russia's biggest priority and is unlikely to end soon. The affirmation is good news for defense contractors as they must up their game to meet all the needs and equipment needed to sustain the unending war.Defense Investment OpportunitiesThe continuous rise in global military expenditure underscores that we live in an increasingly insecure world where things could get worse anytime. As states bolster their military strength in response to the deteriorating security environment, some investors also use the opportunity to pursue high-risk-reward opportunities in the markets.Defenses stocks look set to continue outperforming the overall market as the United States spends billions of dollars to ensure Russia does not get its way in Ukraine. Tensions in the Middle East are also expected to trigger a significant increase in defense spending as the country looks to protect its interest in Israel.Soaring tensions between the United States and China are another frontier that should ensure more of the budget goes to defense contractors, which should offer more support to the sector. A Deloitte outlook survey shows that 88% of senior executives hold a positive view of the aerospace and defense industry for the upcoming year. The optimism stems from various factors, including advancements in emerging technologies in air mobility and fields such as space exploration.Aerospace and defense enterprises prioritizing innovation remain well-positioned to tap into opportunities that crop up amid increased investments in the sector. As the conflict in the Middle East and the Russia-Ukraine war result in a significant decrease in arms stockpiles for the U.S. and European nations, expect a considerable spike in defense budgets.Therefore, defense contractors should experience a consistent demand in the future as countries move to replenish missiles and other defense systems. Similarly, investors can tap into various investment vehicles to benefit from the growth potential in the defense industry.Allied Defense FundThe Allied Defense Fund is turning out to be one of the best investment vehicles for investors eyeing exposure in the defense sector. The fund targets both public and private companies in the U.S. and abroad.While its focus remains on the defense sector, the fund has a diversified asset allocation. It invests 40% of its capital in established defense contractors and allocates 30% to smaller defense companies. The fund puts 20% of its capital in companies involved in emerging defense technologies that can transform the market. About 10% of the fund's capital is invested in other funds specializing in the defense sector.The Allied Defense Fund aims to deliver an annual internal rate of return of 15%. For the initial investment, investors can purchase shares of Allied Defense Fund directly from Reel Shares or financial intermediaries.