We are living in uncertain times with increasing conflict accruing in many parts of the world, from the Far East, Middle East to central Europe. Investing successfully recently has proved to be difficult, and this has not been helped by Donald Trump’s tariff policies.
However, one sector that has and will continues to benefit is the armaments and defence industries. The whole of Europe is re-arming both in military hardware and technology and the share prices of many of those companies in this sector are increasing. On the 2nd June our Government issued the Strategic Defence Review.
Growing threats, new weapons, more troops: key points of UK’s defence review
The government says the UK must be ready to ‘fight and win’ a full-scale war. Here is a summary of its recommendations.
Keir Starmer vows to make Britain ‘battle-ready’ as he unveils defence spending plans and is expected to increase defence spending to 5% GDP.
The Strategic Defence Review (SDR) not only recognises the armed forces’ limited capacity for warfare with a peer or near-peer adversary, but sets out a defence reform plan for new capabilities, a ‘high-low’ equipment mix, reshaped forces and a reinvigorated defence industrial base that will act as an engine for economic growth and prosperity. Given the threat environment, it notes that ‘business as usual’ is not an option.
However, as in all defence reviews, funding will be key to implementation. The review was conducted ‘within the budgetary context of a transition to 2.5% of GDP’ from 2027. An ambition is also noted to spend 3% of GDP on defence in the 2030s if economic and fiscal conditions allow’.
If you are considering investing into this growing sector, rather than buying individual shares that has the added risk of choosing the right stock, why not buy an Exchange Traded Fund that tracks the market indices of many defence stocks both in the UK, Europe and the USA.
Follow the Links to take a look at these top performing Defence & Re-arming Investment Opportunities:
