In the midst of escalating geopolitics and a military resurgence in Europe, WisdomTree Investments has introduced an ETF squarely targeting the continent’s rapidly rearming defense industry.
Gliding a 45 basis point expense fee, WisdomTree Europe Defense Fund (NYSE:WDEF) seeks to replicate the WisdomTree Europe Defense Index, providing investors with a pure-play exposure to European defense stocks.
Other ETFs like this one blend aerospace or technology exposure; this fund doubles down on defense, focusing on companies well-positioned to ride a multi-year wave of government spending on rearmament.
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Why Now?
Since Russia invaded Ukraine in 2022 and support from the Trump administration wanes, Europe has seen a radical shift in security priorities. Nations such as the U.K., Germany and France have stepped up efforts to support Ukraine.
And NATO's 32 member states have also agreed to increase defense spending to 5% of GDP by 2035, representing a significant increase from the long-standing 2% benchmark.
The consequence? A possible arms boom on the continent, and defense companies reaping a bonanza not experienced since the Cold War.
Strategic Exposure
WDEF’s emphasis on European companies may also appeal to investors sensitive to excessive exposure to American megacap tech or home-country policy risk. In an era where tariffs, inflation, and election-year volatility are all center stage, WDEF provides geographic diversification and thematic growth.
It also benefits from the wave of reshoring defense industries, particularly as some countries in Europe become increasingly wary of long-term U.S. foreign policy guarantees.
The Big Picture
From missile systems to cyber defense, the fund gains exposure to cutting-edge military technology without requiring a trip to Silicon Valley. For investors seeking an ETF that combines geopolitics with fundamentals, WDEF could strike the bull’s-eye.
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