BlackRock and BNP Paribas Target Growing Interest in European Defence ETFs

BlackRock and BNP Paribas have launched new exchange-traded funds (ETFs) aimed at investing in Europe's defence sector, adding to a wave of recent financial products tapping into renewed interest in regional military spending.

These launches reflect an acceleration in European defence budgets amid rising geopolitical tensions and a call from former U.S. President Donald Trump for Europe to take more responsibility for its own defense. In total, nine Europe-focused defence ETFs have debuted in the past seven months, according to data compiled by Morningstar Direct.

BlackRock's ETF, under the iShares platform, was listed in Amsterdam and Frankfurt. BNP Paribas' offering, focused specifically on defence companies based in European NATO countries, debuted in Paris, with further listings planned in Germany, Italy, and Switzerland.

So far this year, global investors have poured $8.4 billion into defence ETFs - a figure that already doubles the total inflows seen in all of 2024. Of that, $2.7 billion has gone into the newly created European-focused funds.

The trend signals a shift in investor sentiment, as some asset managers ease previous restrictions on investing in defence stocks in response to strong market performance and policy shifts across the continent.