For four years, the defense sector has found itself on the front line with the multiplication of conflicts: Ukraine, Palestine, Iran… The return of Donald Trump to the American presidency has also encouraged Europe to regain military sovereignty, to no longer rely solely on its transatlantic ally in a context global geopolitics more tense. Last year, the European Union launched the ReArmEurope plan which will mobilize up to 800 billion euros to strengthen its defense capabilities by 2030 and Germany has planned an increase of 500 billion in its borrowings to support future military spending.
European defense companies were the first beneficiaries of these measures. The turnover of the German manufacturer of munitions and armored vehicles Rheinmetall has, for example, skyrocketed and the stock price has soared, before experiencing a sharp decline over the past year which eventually makes it possible to reposition itself on the stock.
« Un effort très insuffisant face aux menaces » : pourquoi les milliards de la Défense peinent à renforcer l'armée française
The same goes for the Italian defense group Leonardo, which remains one of analysts’ favorite stocks. French players are not left out: the specialists Exail (underwater drones) and Exosens (night vision systems) have seen their capitalizations soar while the industrialist Safran, already a manufacturer of engines for missiles, has just strengthened its defense branch with the acquisition of an image analysis specialist satellites for military use.
Another proof that the sector attracts investors is the return of IPOs: in January, the Czech arms and munitions manufacturer CSG (Czechoslovak Group) was listed in Amsterdam and the Franco-German armored vehicle manufacturer KNDS should soon arrive in Paris and Frankfurt.
Finally, less informed savers and fans of diversification are also spoiled for choice with thematic funds and ETFs, which have multiplied in recent months, such as CPR Invest – Europe Défense (eligible for the PEA) targeting companies in sectors having a direct or indirect link with the entire defense value chain. Or the more specialized fund of Swiss Life Gestion Privée on cyber defense launched last summer, which adds to its portfolio of values others specialized in protection against increasing computer attacks.
There are also private equity funds (unlisted companies) dedicated to defense such as those of Tikehau, Sienna IM, Arkea and Bpifrance which allow investment for longer periods.
