Interested in European Defense Stocks? You Might Consider Buying This Global Defense Tech ETF.

1 week ago 7

Unlock banal picks and a broker-level newsfeed that powers Wall Street.

Beth McKenna, The Motley Fool

Mon, Apr 7, 2025, 4:00 AM 9 min read

The banal sell-off is being driven by interest among investors astir the imaginable for the escalating tariff warfare to summation ostentation and dilatory economical maturation successful the United States and globally. Last week was the U.S. banal market's worst week since the commencement of the pandemic successful March 2020. President Trump's alleged reciprocal tariffs connected imports announced connected Wednesday were overmuch steeper than the market, collectively, had been expecting.

What's a growth-oriented capitalist to do? Some investors mightiness privation to see investing successful European defence stocks. Collectively, these stocks person been doing precise good successful 2025, but much importantly, this abstraction should person bully semipermanent maturation potential.

First, let's code wherefore European defence stocks look charismatic and past research a coagulated enactment for investing successful them: Global X Defense Tech ETF (NYSEMKT: SHLD). In 2025, it's returned 16.7% done April 4.

Data by YCharts. This illustration shows that Global X Defense Tech ETF was outperforming the S&P 500 and Nasdaq adjacent earlier 2025 began.

NATO (North Atlantic Treaty Organization) members person go progressively acrophobic astir the U.S.'s committedness to the organization's ngo "to warrant the state and information of its members done governmental and subject means." NATO is the world's biggest subject confederation consisting of the U.S., Canada, and 30 European countries.

Leaders of European nations person responded by calling for ample increases successful defence spending by European countries. Ursula von der Leyen, president of the European Commission, the enforcement limb of the European Union (EU), released a connection connected March 3 connected the "ReArm Europe Plan." (There is overmuch overlap betwixt European NATO members and EU members.) It reads successful part:

We are successful an epoch of rearmament. And Europe is acceptable to massively boost its defence spending. [Defence is the British-English spelling.] Both, to respond to the short-term urgency to enactment and to enactment Ukraine [in its warfare with Russia, which invaded Ukraine successful February 2022] but besides to code the long-term need to instrumentality connected overmuch much work for our ain European security. [Emphasis mine.]

Russia's aggression against Ukraine has ignited peculiarly large concerns among European countries fixed immoderate of their proximity to Russia.