Investing in Europe’s strategic autonomy

A clean, diversified way to access Europe’s sovereignty agenda

Europe’s push for strategic autonomy is no longer up for debate. Energy security, defence readiness, semiconductor independence, resilient supply chains and critical infrastructure have moved from policy discussions to funded priorities.

For investors, the more relevant question today is not whether strategic autonomy matters, but how to access it cleanly.

That challenge is significant. Strategic autonomy inevitably intersects with defence, a sector that can be polarising for investment committees, distributors and end investors.

Single-sector solutions often concentrate risk, amplify controversy and struggle to represent the breadth of Europe’s sovereignty agenda.

A diversified, policy-aligned approach is therefore essential if strategic autonomy is to become a scalable investment allocation rather than a niche trade.

Why single-sector exposure falls short

European ETF flows highlight this tension clearly.

Defence-focused ETFs have attracted substantial inflows and delivered strong performance, reflecting rising military budgets and geopolitical urgency.

By year-end 2025, European defence ETFs had gathered more than €10 billion in assets, with year-to-date flows exceeding €4.3 billion in Europe-only defence strategies and over €5.7 billion in global defence funds.

Yet defence remains a narrow slice of the strategic autonomy story.

It is dominated by a relatively small number of large-cap names and sub-industries, making portfolios sensitive to political headlines, procurement cycles and ESG scrutiny.

For many investors, defence-only exposure is difficult to justify as a core or strategic position -even if they believe strongly in Europe’s sovereignty agenda.

Strategic autonomy is broader by design.

It spans energy production and grids, logistics and infrastructure, food security, software, semiconductors, pharmaceuticals and financial infrastructure. Limiting the focus to a single sector risks overlooking the full structural scope of this transformation.

A multi-theme solution to a multi-decade transition

This is precisely the gap Euronext aims to address with its European Strategic Autonomy index family.

Rather than asking investors to take a binary view on defence, Euronext integrates  Europe’s policy agenda into a multi-pillar investment framework that reflects how capital is actually being deployed across the economy.

At its centre sits the Euronext European Strategic Autonomy Index (EESAP), a diversified benchmark built around ten equally weighted themes covering defence, energy security, technology, infrastructure, logistics, food security and supply chain resilience.

Each theme represents 10% of the index, ensuring that no single sector controls performance or risk.

This structure allows investors to express conviction in Europe’s sovereignty agenda while reducing reliance on any one sector’s gains. Defence contributes meaningfully, but does not dominate the narrative.

Designed for ETF implementation

From the outset, EESAP is built as an investable, ETF-ready benchmark.

Constituents are drawn from the Euronext Developed Europe universe and selected based on revenue alignment: companies must generate at least 50% of revenues from one of the ten strategic themes, using granular FactSet RBICS classifications.

The index is free-float market-cap weighted within themes and capped at the theme level, producing a balanced exposure that combines large, mid and small-cap companies.

Notably, more than 40% of constituents are small caps — often the firms most directly exposed to domestic reshoring, infrastructure build-out and emerging strategic supply chains.

For investors, this matters.

Small and mid-cap exposure improves diversification, enhances alignment with local economic development and captures growth areas that are often absent from traditional European benchmarks.

A cleaner alternative to stitching themes together

European thematic ETF data further illustrates the relevance of this approach.

Assets are heavily fragmented across narrowly defined themes: defence, AI, cybersecurity, infrastructure, energy transition and strategic metals, each with distinct cyclicality and flow dynamics.

Building a strategic autonomy allocation by combining multiple single-theme ETFs introduces complexity, overlap and timing risk.

By contrast, EESAP offers one allocation, one benchmark and one narrative. This is aligned directly with EU policy priorities rather than market fashion. It reflects how governments are spending and how corporates are investing, not just which sectors are in vogue.

ESG evolution without forcing the issue

Another advantage of the multi-theme approach is how it reframes ESG.

Strategic autonomy does not abandon sustainability –  renewable energy, power grids and efficiency remain core components. But it recognises that resilience and security are now integral to Europe’s long-term sustainability.

This evolution is already visible in the market.

Defence stocks, once routinely excluded, now appear in over one-third of European ESG funds.

EESAP reflects this reality without forcing investors into a defence-only posture.

For many institutions, this makes strategic autonomy investable where single-sector defence products remain contentious.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision