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 (-4,02 %) and $ASWC (-3,48 %) recently, but was bothered by the high proportion of US shares and the heavy weighting of Blackbox $PLTR (-3,27 %) among others.

Today I stumbled across the recently launched ETF from WisdomTree, which compiles purely European defense companies: $IE0002Y8CX98 (-6,35 %)

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 (-1,54 %) 🇩🇪

Leonardo (approx. 15%) $LDO (-9,49 %) 🇮🇹

Saab (approx. 10%) $SAAB B (-7,05 %) 🇸🇪

BAE (approx. 10%) $BAE (+0 %) 🇬🇧

Thales (approx. 9%) $THALES (+3,28 %) 🇫🇷

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

It seems like my post about Europas F-35-Sicherheitsdilemma could not have come at a better time:

Dependence on US armaments is increasingly perceived as a risk factor for Europe's military and security sovereignty and is now being publicly addressed at the highest political level faster than I would have expected.

French President Emmanuel Macron

President of France Emmanuel Macron has made it clear in an interview with Le Parisien that he is critical of Europe's purchase and use of US armaments and proposed replacing them with European alternatives.

Macron was also quite clear: "Those who buy Patriot systems should be offered the next generation of the Franco-Italian SAMP/T. Those who buy F-35s should be offered the Rafale fighter aircraft."

His main concern is greater strategic autonomy for Europe:

• Criticism of US systems: Poland plans to buy American F-35 fighter jets ($LMT (-0,23 %)) and Patriot ($RYTT34). Macron questions these decisions and proposes European solutions.
• European optionsMacron specifically mentions approaches such as joint European development projects to reduce dependence on the USA. Examples include European fighter jets such as Saab Gripen ($SAAB B (-7,05 %)), Eurofighter ($AIR (-6,37 %) - $BA. (-5,39 %) - $MTX (-8,29 %) - $LDO (-9,49 %)) or Dassault
  Rafale ($AM (-6,83 %)) or air defense systems (e.g. SAMP/T from $HO (-4,63 %), $BA. (-5,39 %), $AIR (-6,37 %) and $LDO (-9,49 %) or Oerlikon Skynex from $RHM (-1,54 %)).
• Long-term strategyMacron's proposals aim to strengthen Europe's military independence by pooling technology, production capacities and resources in the EU member states' own economic area in the long term.

Macron is thus sending a clear signal for more European cooperation in the defense sector and against an excessive focus on US technology.

#emmanuelmacron
#usa
#defense
#verteidigung
#rüstungsindustrie
#europa
$R3NK (-8,37 %)
$IE0002Y8CX98 (-6,35 %)
$HAG (-4,48 %)

Hello everyone, the last few days there has been a lot of talk here about the new European Defense ETF. Now the Rheinmetall CEO is talking about the fact that the US defense industry is indispensable.

$RHM (-1,54 %)
$IE0002Y8CX98 (-6,35 %)
$DFEN (-4,02 %)

According to Papperger, CEO of Rheinmetall, Europe cannot currently replace the USA in the defense sector. Papperger spoke out in favor of continuing the transatlantic partnership in the field of armaments as well.

13.03.2025

Speaking on Deutschlandfunk radio, the Rheinmetall CEO said that the USA has very special technologies in the field of weapons technology that Europe does not have at the moment. Complete independence from the USA would cost Europe a great deal. He did not believe that politicians wanted that. Papperger advocated seeking talks with US President Trump. He asked: "Do we really want to destroy the transatlantic partnership?" That is not possible. The USA is currently the leading nation in the world and we need to find sensible ways of dealing with it.

Turnover up 36 percent, profit increases by 61 percent

Rheinmetall manufactures tanks, artillery, military trucks, air defense systems, drones and ammunition. The company now generates 80 percent of its consolidated sales with military goods; business as an automotive supplier is becoming less important. The Group presented its corporate figures for the past year yesterday in Düsseldorf. According to the figures, turnover increased by 36 percent to around 9.8 billion euros. Profits increased by 61 percent to around 1.5 billion euros, the highest level in the company's history.

https://www.deutschlandfunk.de/usa-haben-technologien-die-europa-nicht-hat-rheinmetall-chef-setzt-sich-fuer-transatlantische-partne-100.html

$IE0002Y8CX98 (-6,35 %) - WisdomTree Europe Defense UCITS ETF - EUR Acc

TOP 10

$RHM (-1,54 %)

$LDO (-9,49 %)

$SAAB B (-7,05 %)

$BA. (-5,39 %)

$HO (-4,63 %)

$RR. (-12,02 %)

$AIR (-6,37 %)

$SAF (-5,09 %)

$KOG (-9,46 %)

$MRO (-10,68 %)

https://api.fundinfo.com/document/b9034489473e1a780e6657260ca4fb58_248438/MR_DE_de_IE0002Y8CX98_RES_2025-03-07.pdf

"The index was developed by WisdomTree, Inc. ("WT"). The selection of European

companies in the index is based on their share of sales from the defense sector. The Index also seeks to exclude companies associated with weapons that are banned under international law, such as cluster munitions, anti-personnel mines, and biological and chemical weapons. The index also seeks to exclude companies that violate certain generally accepted international norms and standards, such as the principles of the United Nations Global Compact.

At least 20 stocks that meet the revenue share criteria as well as additional minimum requirements regarding market capitalization and liquidity are selected for inclusion. The selected companies in the index are weighted according to free float-adjusted market capitalization - adjusted by the exposure score - while complying with the upper limits and criteria defined in the index methodology.

The index is rebalanced every six months."

#wisdomtree
#europe
#defense
#etf
#defenseetf
#rheinmetall
#leonardo
#saab
#baesystems
#thales