A new wave of defence-focused ETFs and funds has emerged, making it easier for investors to pour capital into the sector
In May 2025, Amundi – Europe’s largest asset manager – announced the launch of a “European Defence” ETF, the first of its kind to focus purely on European defence equities. This fund, set to list across major exchanges in the coming weeks, will track the STOXX Europe Total Market Defence index, which is composed of European aerospace & defence companies central to the EU’s rearmament effort. The timing is no coincidence: Amundi cites “surging interest from investors” as Europe undertakes a historic military upgrade. Other providers have been quick to market as well. WisdomTree launched its Europe Defence UCITS ETF (ticker WDEF) on March 4, 2025, and it attracted a remarkable $588 million in inflows within its first month. VanEck’s Defence ETF (global focus) has seen even more – about $1.9 billion year-to-date, with over $1 billion in March alone. Even in the US, which traditionally had broad aerospace & defence funds, a niche product appeared: the first ETF targeting just European defence (ticker EUAD) debuted and is gathering assets. The rise of these thematic investment vehicles is mobilizing capital on a large scale. By bundling defence stocks into an easy-to-trade package, ETFs allow a wide set of investors (including those who might not pick individual defence stocks) to allocate to the theme. Retail investors, for example, can now bet on Europe’s defence upswing with a single click. Thematic institutional funds (like dedicated security/defence mutual funds) are also seeing inflows – e.g., some banks have relaunched defence-focused certificates and notes that had been dormant. This democratization and packaging of defence investment helps channel fresh money into the sector quickly. In turn, that supports higher valuations and provides liquidity, which helps companies when issuing equity or debt. The co-branding of Amundi’s ETF with STOXX and the EU’s strategic autonomy narrative is telling: it shows an alignment between financial product development and policy goals. The index it tracks is designed to capture those firms likely to benefit most from Europe’s defence spending surge. As more such products come to market, we can expect an even broader investor base (including ESG-oriented investors who feel more comfortable via a structured product that ensures controversial weapons are screened out). Overall, defence ETFs have rapidly become a key mechanism for capital mobilization – essentially funneling the current macro theme (higher defence spending) into investable form for global capital.
Sources
Amundi and STOXX collaborate to launch Amundi ETF investing in the European defense sector
2025 Puts European & Global Defense ETFs on the Map