Introduction to the WisdomTree Europe Defence ETF
The WisdomTree Europe Defence ETF has raised an impressive 1.2 billion euros in investor funds in less than 50 days since its launch on March 4, 2025. This swift influx of capital reflects the growing interest in European defense companies and the defense industry, especially in times of geopolitical tensions.
Background and Significance
- Market Launch and Success: The ETF is the first of its kind to focus exclusively on European defense companies. This sets it apart from other defense ETFs that often have a strong emphasis on U.S. companies.
- Portfolio Composition: The portfolio of the WisdomTree Europe Defence ETF is tracked by the proprietary WisdomTree Europe Defence Index. The largest weights are Rheinmetall (14%), Thales (13.2%), BAE Systems (13%), and Leonardo (12.6%).
- Geographic Distribution: The geographic distribution of the ETF reflects the strength of the European defense industry, with concentrations in France (28.3%), the United Kingdom (24.8%), Germany (18.5%), and Italy (13.4%).
Costs and Returns
- Expense Ratio: The ETF has an annual total expense ratio of 0.40%, positioning it in the competitive midfield.
- Returns: The return of the ETF has been approximately 1% so far.
Comparison with Other ETFs
- Comparable ETFs: Other comparable ETFs, such as HANetf’s Future of Defence ETF, have taken longer to reach similar fund volumes. The Future of Defence ETF has a fund volume of about 1.74 billion euros but was launched back in July 2023.
- Vaneck Defense ETF: The Vaneck Defense ETF has a strong focus on U.S. companies and excludes Rheinmetall, making the WisdomTree Europe Defence ETF more attractive for investors who prefer European companies.
Conclusion
The rapid success of the WisdomTree Europe Defence ETF demonstrates the growing interest in European defense assets amid geopolitical tensions. The focus on European companies and quick capital attraction make this ETF an attractive investment for investors looking to invest in the European defense industry.