1Wk·

Wisdom Tree European Defense ETF 🇪🇺- Alternative to US-heavy defense ETFs

Minimizing the US cluster risk is currently a major topic for investors. It is perhaps even THE topic since the second Trump administration has been throwing tariffs and isolationist positions around.

As part of an incipient reallocation in the portfolio $DFEN (-0.02%) and $ASWC (+0.23%) recently, but was bothered by the high proportion of US shares and the heavy weighting of Blackbox $PLTR (-0.43%) among others.

Today I stumbled across the recently launched ETF from WisdomTree, which compiles purely European defense companies: $IE0002Y8CX98 (-0.17%)

Some quick raw data:

Listed for the first time on 3/4/2025

TER: 0.4% p.a.

Physical

Accumulating

WKN: A40Y9K

IE0002Y8CX98

Largest positions:

Rheinmetall (approx. 20%) $RHM (+1.09%) 🇩🇪

Leonardo (approx. 15%) $LDO (-0.5%) 🇮🇹

Saab (approx. 10%) $SAAB B (+2.21%) 🇸🇪

BAE (approx. 10%) $BAE (+0%) 🇬🇧

Thales (approx. 9%) $THALES (+0.41%) 🇫🇷

This investor will reallocate a little. He is not giving investment advice, but rather enjoying the diversity of Europe. 🇪🇺

Sources:

https://www.wisdomtree.eu/en-gb/etfs/thematic/wdef---wisdomtree-europe-defence-ucits-etf---eur-acc

https://www.wisdomtree.eu/en-gb/strategies/european-defence

https://www.justetf.com/de/etf-profile.html?isin=IE0002Y8CX98#chart

https://www.computerbild.de/artikel/cb-News-Finanzen-Erster-ETF-fuer-europaeische-Verteidigung-39553857.html

4 Comments

Stonedeath@Stonedeath

1Wk

However, it should be borne in mind that some of the stocks included, especially the German stocks, have now undergone a hyperbolic development in which a great deal is already priced in and disappointments are inevitable due to the expected incompetent decisions of our sham political elite. If you want to be a little safer, allocate both ETFs 50:50.

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C.S.@sobrius

1Wk

@Stonedeath I agree. $RHM and co. are the new Gamestop. But the risk of going down is lower with a broadly diversified ETF. I did exactly as you suggested. I now hold two defense ETFs. One World with the usual USA component and the one mentioned above. There are of course a few overlaps, but I don't want to get bogged down with individual stocks. I recently took another look at $HAG with its absurdly high current valuation and a P/E ratio of 696. I had the share when it was around €30 and sold it a long time ago because I thought it was exhausted. But that was before Trump.

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GHF@GHF

1Wk

I understand your motives, they reflect the spirit of the times. But I'm skeptical as to whether it's really smart to rotate countries now after the US stock markets have plummeted and the European ones have risen quite well, especially the European arms market.
For me, the US markets currently offer good buying opportunities, even if the bottom has perhaps not yet been reached.

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C.S.@sobrius

1Wk

@GHF You have a point. In contrast, am I asking whether the US correction was extensive enough or whether there is another one to come? It wasn't huge compared to the massive setbacks of the last 10 years. It makes sense to me because I am switching from a more speculative to a more long-term approach. Time in the market beats timing the market.

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