ETFs to Profit from Europe’s Defense Spending Surge

With U.S.-Europe ties uncertain, the continent’s defense sector is an increasingly attractive target for investors. Areas like hypersonic missile technology, satellite networks, and critical mineral supply chains hold significant potential.

There is growing investor interest in ETFs that provide exposure to the defense sector, especially those offering high or pure exposure to European defense companies.

Here’s a list to explore:

ETFs with Exposure to European Defense Stocks

European Defense Stocks ETFs for U.S. investors

Most ETF investors are now familiar with the most popular U.S.-listed defense ETFs, such as the iShares U.S. Aerospace & Defense ETF (ITA), Invesco Aerospace & Defense ETF (PPA), SPDR S&P Aerospace & Defense ETF (XAR), and Global X Defense Tech ETF (SHLD).

However, ITA, PPA, and XAR are heavily tilted toward U.S. companies (if not purely).

SHLD on the other hand has solid exposure to German companies (8.4%), British (7.2%), French (6.7%), Italian (5.4%) and Swedish (3.5%) companies with big names like Rheinmetall AG, BAE Systems PLC, Thales SA, Leonardo SPA, and Saab AB.

Select STOXX® Europe Aerospace & Defense ETF (EUAD)

Meanwhile, the Select STOXX® Europe Aerospace & Defense ETF (EUAD) tracks the STOXX® Europe Total Market Aerospace & Defense Index, providing investors with targeted exposure to European companies that generate at least 50% of their revenue from the manufacture, service, supply, and distribution of aeronautical equipment, components, hardware, software, and electronic systems.

The fund also includes companies producing equipment, systems, infrastructure, and electronics that directly support civil and military defense efforts.