The first SFDR Article 8 defence ETF in Europe
SFDR Article 8 exposure to European defence
Europe commits to serious defence investment
After decades of underspending, Europe is finally rearming. The EU has outlined an €800bn defence plan, while individual European NATO members are rapidly boosting their own military budgets.
Strategic autonomy means buying European
Europe’s rearmament is not just about spending more – it is about building defence independence. To reduce reliance on US equipment, the EU is prioritising European-made weapons, vehicles, and systems, providing a strong tailwind to the European defence sector.
World’s first Article 8 defence ETF*
Owing to the strict screening criteria of the ETF’s index, it is classified under SFDR as Article 8. The index has zero tolerance for controversial weapons.
*As demonstrated in the ETF Database.
Future of European Defence Screened UCITS ETF (ARMY) aims to provide responsible exposure to NATO member defence and cyber defence spending, ex-US.
With threats mounting and US support no longer guaranteed, European NATO members are overhauling their defence strategies and sharply increasing military spending.
After a decade of failing to meet the 2% of GDP target, Europe has collectively underspent by an estimated €850bn. Now, to rebuild and modernise their armed forces, governments are directing this renewed investment towards European defence firms – boosting the continent’s strategic self-reliance.
Key Risks
Thematic ETFs are exposed to a limited number of sectors and thus the investment will be concentrated and may experience high volatility. Investors’ capital is fully at risk and may not get back the amount originally invested. Exchange rates can have a positive or negative effect on returns. For a complete overview of all the risks, please refer to the ”Risk Factors” in the Prospectus.
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NAV History
Source: HANetf, data as of 31.08.2026. Please note that all performance figures are showing net data. Performance before inception is based on back-tested data. Back-testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such a strategy would have been. Back-tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in EUR. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (Prospectus) before investing and should refer to the section of the Prospectus entitled Risk Factors for further details of risks associated with an investment in this product. If fund is less than 12 months old, YTD field will be calculated since inception. When you invest in ETFs your capital is at risk.
No. of holdings: 28
Companies must derive more than 50% of their revenues from the manufacture and development of defence equipment (such as military armoured vehicles & tanks, weapon systems and missiles, munitions and accessories, electronics & mission systems, and naval ships), defence technology applications, or cyber security contracting with a NATO member nation verified by publicly available contract information. Companies manufacturing military aircraft must derive at least 20% of revenue from defence.
Constituent business operations must comply with United Nation Global Compact (UNGC) principles and Organization for Economic Cooperation (OECD) Guidelines for Multinational Enterprises.
Companies involved in the production development or maintenance of anti-personnel mines, biological or chemical weapons, cluster munitions or depleted uranium are excluded from consideration for the index. Additionally, companies must derive less than 5% of their revenue from tobacco manufacturing, distribution, and the sale of tobacco products as well as not derive any revenue from the exploration, mining, or refining of thermal coal.
European defence refers to the collective military capabilities and defence industry across Europe, including land, air, and naval systems. It encompasses national armed forces, allied cooperation through NATO, and the companies that design, manufacture, and maintain defence equipment.
Europe faces geopolitical challenges such as territorial disputes, regional tensions, and global security threats. Strengthening defence capabilities supports national sovereignty, NATO commitments, and collective security across the region.
Defence budgets are determined by national governments, often influenced by GDP, strategic priorities, NATO targets, and current security threats. Spending covers personnel, equipment procurement, R&D, and operational readiness.
Key focus areas include advanced weaponry, aerospace and naval systems, cybersecurity, surveillance, drones, and electronic warfare. Companies also develop supporting technologies such as communications, sensors, and logistics systems.
Conflicts, regional disputes, or rising global threats often drive higher procurement and accelerated modernization programs. European countries may invest more in strategic capabilities, including air defence, naval fleets, and cybersecurity.
Technology is central to maintaining competitive and effective defence forces. Innovations in drones, AI, cyber systems, precision weapons, and communications enhance operational efficiency and strategic deterrence.
European countries cooperate through NATO, EU defence initiatives, and bilateral agreements. Collaboration can include joint procurement, shared research projects, and coordinated responses to security threats.
Risks include delays in procurement programs, dependence on government budgets, rapid technological changes, supply chain challenges, and geopolitical uncertainty that can impact defence planning and operations.
European defence contributes to NATO and international missions, supports stability in neighbouring regions, and can provide strategic deterrence against global threats, reinforcing alliances and maintaining peace.
The sector is modernising with investments in digital technologies, autonomous systems, cybersecurity, and next-generation platforms. Governments and companies are increasingly focusing on interoperability, sustainability, and rapid-response capabilities.
Relevant European defence stocks may include large aerospace, defence electronics, naval, cyber and systems companies. Examples include Safran, Thales, Leonardo, BAE Systems, Saab, Rheinmetall, Rolls-Royce, Airbus, Kongsberg Gruppen and Aselsan. These businesses can be exposed to areas such as aircraft engines, avionics, missiles, armoured vehicles, radar, naval systems, secure communications and defence services. When researching the theme, investors may want to understand how much revenue comes directly from defence, how order books are supported by government procurement, and whether companies meet any screening criteria. Defence spending cycles, export controls, programme delays and political decisions can all affect performance.
Disclaimer: These FAQs have been generated with the assistance of AI and may contain errors or omissions. They are provided for general information only and do not constitute investment advice, a recommendation, or an invitation to buy or sell any investment.
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China’s rapid military expansion has triggered the most significant rearmament drive in the Indo-Pacific since the Cold War. In response, regional powers such as India, Japan, South Korea, and Taiwan are not only increasing their defence spending but also reshaping their industrial strategies to prioritise domestic manufacturing, export growth, and long-term self-reliance.
This rearmament across the Indo-Pacific (excluding China) is giving rise to a new generation of defence companies and long-term investment opportunities.
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