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How to Invest in European Defence Stocks in 2025
Ruby Layram
28th May 2025
Defence stocks are back in the spotlight, and if you’re curious about how to get in on the action in Europe, you’re not alone! With global tensions rising and European governments ramping up defence spending, there’s a lot of interest in this sector right now. But how do you actually invest in European defence stocks?
In this guide, we will explain exactly how to invest in European defence stocks as a beginner in the UK.
What’s the Big Deal with Defence Stocks?
Let’s be honest, defence stocks aren’t everyone’s first thought when it comes to investing. But with Europe’s shifting geopolitical landscape, governments are pledging to spend more on security and military gear.
That means companies like BAE Systems, Airbus, Rheinmetall, and Thales could see a nice boost.
These are the big names in Europe’s defence sector, working on everything from fighter jets to cybersecurity. And if governments are buying, these companies could be raking in the cash, and sharing some of it with investors!
Why You Might Want to Invest
So, why should you consider putting your money into European defence stocks? Here are a few reasons:
- Government contracts: Defence companies tend to have long-term contracts with governments, so there’s a bit of stability in their earnings.
- Growing budgets: Countries like Germany, France and the UK are pledging to increase military spending, which could be good news for defence firms.
- Diversification: If you’ve already got a lot of tech or consumer stocks, defence can add a new dimension to your portfolio.
Of course, investing in defence isn’t for everyone, some people might feel uneasy about the ethical side. But if you’re comfortable with it, there could be opportunities ahead.
How to Actually Buy European Defence Stocks
Alright, so you’re keen to take the plunge. Here’s how to get started:
- Pick your platform: You’ll need an investment platform or broker that offers access to European stock exchanges. UK platforms like eToro, Interactive Investor, and Invest Engine can all help you buy European shares.
- Do your research: Have a look at individual companies like BAE Systems (LSE: BA.), Thales (EPA: HO), or Rheinmetall (ETR: RHM). Check out their balance sheets, earnings forecasts, and how they’re expected to benefit from rising defence spending.
- Consider ETFs: If you don’t want to pick individual stocks, you can go for a defence ETF (Exchange-Traded Fund) that covers European defence. These funds track a basket of companies, so you’re automatically diversified. For example, the HANetf Future of Defence UCITS ETF and the WisdomTree Europe Defence UCITS ETF are both focused on the European defence sector.
- Buy and hold: Like most investments, patience is key. Defence stocks might be a bit volatile (especially if political winds change), so be prepared to hold on for the long term.
Things to Watch Out For
Before you dive in, here’s what to keep in mind:
Ethical concerns: Some investors steer clear of defence because of the nature of the industry. It’s worth thinking about your own comfort level.
Currency risks: If you’re buying European stocks in euros, remember the pound/euro exchange rate can affect your returns.
Geopolitical risk: Defence is heavily linked to government decisions, so big policy shifts (or peace deals!) could change things quickly.
The Best European Defence Stocks to Buy in 2025
If you’re interested in buying European defence stocks, it is probably helpful to understand the best stocks to buy.
Here is an overview of some of the hottest stocks to consider in 2025.
Rheinmetall AG (ETR: RHM)
A leading German defence contractor specialising in armoured vehicles, artillery, and ammunition.
Rheinmetall has seen substantial growth, with a significant order backlog and increased demand due to Germany’s defence modernisation efforts.
BAE Systems plc (LSE: BA.)
The UK’s largest defence company, BAE Systems offers a comprehensive range of military solutions, including fighter jets, submarines, and cybersecurity services.
The company has reported record orders and continues to benefit from both domestic and international defence contracts.
Leonardo S.p.A. (BIT: LDO)
Italy’s premier defence firm, Leonardo is involved in aerospace, helicopters, and defence electronics.
The company has experienced double-digit revenue growth and is actively participating in major European defence projects.
Thales Group (EPA: HO)
A French multinational specializing in defence electronics, cybersecurity, and aerospace. Thales has secured significant contracts and boasts a strong order backlog, positioning it well amid increased European defence spending.
Saab AB (STO: SAAB-B)
Sweden’s leading defence company, Saab produces fighter jets, submarines, and missile systems.
With Sweden’s recent NATO membership and increased defence spending, Saab is expected to benefit from new business opportunities.
Final Thoughts
Investing in European defence stocks can be a fascinating way to tap into a growing sector. With governments upping their spending and Europe’s defence sector in the spotlight, there are definitely opportunities, but also a few risks.
If you’re feeling curious, start by doing your research and maybe dip your toe in with an ETF to spread the risk. And of course, if you’re not sure if this kind of investing is right for you, it’s always a good idea to chat to a financial adviser!
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here, including opinions, commentary, suggestions or strategies, are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
ACTUAL PROBLEM!
REALLY!
AND ALL THAT IS BECOMING EVERY TIME MORE AND MORE EXPENSIVE!
AND THE EUREPEAN ECONOMIES ARE SUFFERING!
KIND REGARDS,
TEODORA
5.7.2025
SOFIA