Defense Investments: The Key to Boosting Your Savings
Amid rising geopolitical tensions and Europe’s growing strategic assertiveness in the area of defense, the sector is now attracting the interest of investors. From specialized funds to thematic ETFs and private equity, there is a growing range of options for investing in this new political priority.
European Defense: A Major Strategic Shift
The war in Ukraine, the United States’ strategic shift toward domestic policy, and the multiple threats to the continent’s stability have accelerated a growing realization: Europe must strengthen its military sovereignty.
At the initiative of France, Germany, and the European Commission, massive funding plans have been launched. The Readiness 2030 program calls for up to 800 billion euros in EU-wide investments, accompanied by lending mechanisms such as the SAFE fund, which has 150 billion euros to finance defense projects, including those outside the EU.
A direct result of this mobilization: defense stocks are skyrocketing. Companies such as Rheinmetall, Leonardo, Thales, and Dassault Aviation have posted spectacular gains since January 2025, ranging from 60% to 130%. Even mid-sized companies specializing in sensors, drones, or embedded systems, such as Exail Technologies and Exosens, are seeing record valuations.
Investing in Defense: Options for Investors
For individual investors, there are several ways to gain exposure to this growing sector. Buying stocks directly offers maximum leverage on performance, but requires active management and a high risk tolerance, particularly given the sometimes stretched valuations. Major European defense companies are eligible for the PEA, which enhances their tax advantages.
Thematic ETFs offer an accessible and diversified alternative. The WisdomTree Europe Defense UCITS ETF, launched in March 2025, has already surpassed $1 billion in assets under management. It allows investors to passively invest in a basket of European companies in the sector. Other ETFs, such as those from VanEck, HanETF, and iShares, also target the defense, cybersecurity, and aerospace sectors.
More experienced investors can turn to private equity through funds such as Bpifrance Défense or Tikehau Aéro Partenaires, which require minimum investments of 500 euros and 100,000 euros, respectively. These investment vehicles provide indirect financing to strategic small and medium-sized enterprises (SMEs) and mid-sized companies within the European ecosystem. However, they offer limited liquidity and require an investment horizon of several years.
Finally, certain structured products offer conditional exposure to the sector, with attractive potential returns and partial capital protection. Linked to baskets of defense stocks, these products appeal to investors seeking regular income without active management.
Europe’s strategic shift toward military autonomy therefore opens up a new range of opportunities for investors. However, it is essential to fully understand the risks associated with each product before investing your capital.
