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European defence funds rise on Venezuela intervention
While US intervention in Venezuela does not directly impact European defence firms, it adds to the incentives for Europe to increase its defence spending
European defence funds and investment trusts gained a boost on the morning of 5 January following news that the US had captured Venezuela’s erstwhile president Nicolás Maduro had been captured by US special forces over the weekend.
Exchange-traded funds (ETFs) that track European defence stocks responded positively. The WisdomTree Europe Defence UCITS ETF (LON:WDEF) gained 5.1% and the HANetf ICAV - Future of European Defence Screened UCITS ETF (LON:NAVY) gained 4.7% on 5 January.
Defence stocks like BAE Systems (LON:BA.) and Rolls-Royce (LON:RR.) drove gains on the FTSE 100, rising 5.5% and 2.9% respectively during the same period.
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“The US intervention in Venezuela doesn’t move the needle for European defence companies but it matters as another datapoint in a more interventionist, less predictable world,” said Aneeka Gupta, director, macroeconomic research at WisdomTree.
“Episodes like Venezuela tend to harden political resolve to meet or exceed NATO’s 2% of GDP target, replenish munitions, invest in air and naval power, and upgrade surveillance and cyber capabilities,” Gupta added.
Why Venezuela intervention could impact European defence commitments
Since Donald Trump’s return to the White House nearly a year ago, European nations have been pushing to unlock greater funding for defence.
This was driven initially by Trump stating that he would insist NATO members meet their spending obligations, and has been fuelled by a US National Security Strategy which places greater emphasis on ‘diplomatic stability’ with Russia than on existing European alliances.
“The action in Venezuela can be seen within the context of the Trump administration’s recently published National Security Strategy,” said Tom Bailey, head of research at HANetf. “For European policymakers and investors alike, this reinforces the case for accelerating defence spending and industrial capacity.”
Trump attempted to secure a Russia-Ukraine peace deal late last year, but hasn’t yet achieved a breakthrough. The latest developments have left markets assuming a reorientation of European defence priorities.
“The market reaction suggests investors are increasingly pricing in a future in which Europe must shoulder a greater share of its own security – not only because of Russia, but because of growing uncertainty over the durability of US commitments within NATO,” said Bailey.
Investment trusts for European defence exposure
One way of accessing the European defence spending trend is to use an investment trust that offers defence exposure.
The AIC analysed the investment trusts that have the most defence exposure, based on their allocations to twenty defence stocks – including Babcock International (LON:BAB), BAE Systems, Thales (PARIS:HO) and Safran (PARIS:SAF).
Here’s the top 10 Europe-focused investment trusts for defence exposure:
Swipe to scroll horizontally
Investment trust
% portfolio in defence stocks
Data as at
BlackRock Greater Europe
10.24
30/9/2025
European Opportunities Trust
6.75
31/12/2025
JPMorgan European Growth & Income
2.78
31/10/2025
With over 10% of its portfolio allocated to defence stocks, BlackRock Greater Europe (LON:BRGE) is the Europe-focused investment trust that currently has the greatest exposure to defence.
Shares in BRGE gained 1% on 5 January.
Top ETFs for European defence
There are various ETFs available for investors that want to gain exposure to defence stocks.
One of these is the Van Eck Defense UCITS ETF (LON:DFNS), which tracks the MarketVector Global Defence Industry index.
The first ETF to focus specifically on European defence companies was the WisdomTree Europe Defence UCITS ETF, which listed on the LSE on 12 March. The ETF focuses exclusively on European-based companies in the defence industry.
WDEF has recently been joined by the Future of European Defence UCITS ETF from HANetf. NAVY follows HANetf’s Future of Defence UCITS ETF (LON:NATP), which had over $2.8 billion in assets under management as of 27 August 2025. While NATP holds companies aligned to any NATO member state (including the US), NAVY focuses specifically on European defence stocks.
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Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.
Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.
Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.
