Why ESG funds have warmed to defence stocks

Brexit

Funds investing in weapons companies have grown in popularity following Russia’s invasion of Ukraine and a drive by Europe to boost its defence spending

By David Ricketts

Defence ETFs have pulled in $6.2bn of new money globally so far this year as investors seek to increase their exposure to the sector Photo: Nick Paleologos/Bloomberg via Getty Images

Some of Europe’s ESG-conscious investors have warmed to defence stocks, with a raft of new products that allocate money to a sector that was previously off-limits.

Data from Morningstar shows more than a dozen defence ETFs have been launched in Europe since the start of 2024, including by iShares, Invesco and WisdomTree.

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