Investing in defence: the easiest way to buy into the boom

The defence sector has taken off, but the opportunities for stock picking are more limited. We explain what to buy

ylesku Bridge in Assynt Scotland UK, with an RAF jet flying past
(Image credit: Getty Images)

The defence sector has firmly returned to favour since Russia invaded Ukraine. The Euro Stoxx Aerospace & Defence index has nearly doubled since February 2022, compared with a 26% increase for the Euro Stoxx 50 index. 

Many individual stocks have done exceptionally well. Rheinmetall (Frankfurt: RHM) has quintupled off the back of a huge increase in sales, such as the artillery order mentioned above: it expects revenues to reach €10 billion this year, from €6.4 billion in 2022. Saab (Stockholm: SAAB-B) has quadrupled. Investors quickly latch on to any stock that looks like a new beneficiary of the trend. Norway’s Kongsberg (Oslo: KOG) has seen its shares double this year. 

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Frederic is an investment analyst. He started his career at JP Morgan in Paris. He has more than ten years of experience investing in private equity and also worked with the 3i debt management team investing in private debt. He is an ACCA member and a CFA charterholder. He graduated from Edhec Business School.