Future of European Defence UCITS ETF

Issuer: HANetf

Asset Class: Equity

TER: 39bps

Trading Currency: GBX

Pays Income: False

Listing Date: 11 Apr 2025

Ticker: NAVY

ISIN: IE000I7E6HL0

This investment vehicle offers targeted exposure to the global defence industry, capitalizing on a significant shift in the geopolitical landscape. Following recent global conflicts, many European and NATO member countries have substantially increased their commitments to defence spending, with a renewed focus on meeting and exceeding the long-standing guideline of allocating 2% of GDP to military budgets. This surge in government expenditure creates a powerful and sustained tailwind for companies operating within the military and defence sectors, suggesting a long-term growth trajectory for the industry as nations prioritize rearmament and modernization of their armed forces.

The underlying portfolio consists of publicly traded companies from NATO+ allied nations that are poised to benefit from this increased spending. To be included, these firms must generate over 50% of their revenue from the defence sector. This includes a diverse range of activities such as aerospace manufacturing, the development of advanced military hardware, cybersecurity solutions for national security, and sophisticated satellite and communication technologies. The strategy provides a comprehensive investment into the entire defence ecosystem.

Furthermore, the investment incorporates responsible screening criteria, specifically excluding companies involved in the production of controversial weapons such as cluster munitions and anti-personnel landmines. This approach allows investors to participate in the growth of the defence theme while adhering to certain ethical considerations. It represents a strategic allocation for those looking to gain exposure to companies fundamental to national and international security in an era of renewed great power competition.