Written by Sudip Kalu Gupta
LONDON (Reuters) – Fund manager Van Eck's defense industry-focused exchange-traded fund (ETF) has reached more than $550 million in net assets in its first year, it said on Monday, adding to the current global It highlighted how conflict is driving investors into the defense industry. .
The New York-based company launched the VanEck Defense UCITS ETF at the end of March 2023. The ETF rose about 20% in 2024, reaching net assets of about $560 million within a year.
Many governments are calling for increased military spending in the wake of the war in Ukraine and the conflict between Israel and Hamas that also involves Iran.
In April, British Foreign Secretary David Cameron called on NATO allies to step up defense spending and production to support Ukraine against Russia, while Israel also amended its budget to increase defense spending.
“Traditionally, the defense industry has been a fairly sensitive topic, especially in Europe,” VanEck Europe CEO said. My perspective has changed,” he said. Martin Rosemüller.
The top ETF holding is French stock Thales. saffron (EPA:), as well as Italian company Leonardo and U.S. defense technology company Booz Allen (NYSE:) Hamilton.
Earlier this month, Goldman Sachs strategists wrote that European defense stocks are on the decline, citing the recent outperformance of the STOXX European Aerospace and Defense Index, which is expected to rise about 27% in 2024, outpacing the 5% rise in the STOXX Europe-wide index. Said not to recommend it.
Nevertheless, Grégoire Labane, fund manager at APICIL Asset Management, said defense stocks will remain top priorities in the long term, given the global political situation.
“We believe defense remains an essential part of fund managers' portfolios, given that governments in Europe and around the world continue to increase military spending,” said Laverne, who owns Thales and Safran. he added.
