Asset manager VanEck has listed the VanEck Defense UCITS ETF on the London Stock Exchange and Deutsche Börse Xetra. The firm writes that this new ETF allows investors to invest globally in companies operating in the defence industry.
“The defence sector has traditionally been a sensitive topic in Europe. However, since the start of the war in Ukraine, the views on security and defence policy has started shifting, as the need for security policy has become more obvious,” explains Martijn Rozemuller, CEO at VanEck Europe. “Due to the Russian invasion of Ukraine, tensions in Asia, and global uncertainty, security and defence are back on investors’ minds after being shunned for several years.”
Many governments of Western European countries that have consistently missed NATO’s two per cent target for defence spending in the past have now announced that they will make significant investments in defence infrastructure and stockpiles and will strive to meet the two per cent target in the future. “Companies in the security and arms industries could benefit from this development in the coming years,” Rozemuller says.
The firm writes that the VanEck Defense UCITS ETF is currently the only ETF available in Europe that offers investors access to this sector. Using a pure-play approach, the fund aims to invest in companies in the future that generate the majority of their revenue from the following defence-related products or services: defence equipment, aerospace technology, communications systems and services, satellite technology, unmanned aerial vehicles, security software, IT hardware and services, cybersecurity software, training and simulation solutions, digital forensics, tracking devices, and e-authentication or biometric identification applications.
To this end, the ETF follows the MarketVector Global Defense Industry Index and explicitly excludes companies that generate sales with controversial weapons or have demonstrably failed to comply with established standards. The ETF is classified as Article 6 within the meaning of the EU Sustainable Finance Disclosure Regulation.
