WisdomTree Europe Defence UCITS ETF (WDEF) was launched on 11 March 2025 and since then has achieved $554m in net new flows in its first two weeks of trading. The ETF currently has $511m in assets under management.
The European defence story is evolving rapidly. Analysts forecast that the sector is likely to grow quickly to account for 3.1% of total European GDP by 2029. It could also have knock on impacts on other sectors, like technology, as more money is made available for R&D.
Long term transformation of the sector
“European governments are not making short-term, reactionary purchases – they appear to be redesigning their defence strategies for the long term,” said Adria Beso, Head of Distribution, Europe for WisdomTree.
The EU recently unveiled a comprehensive plan to mobilise €800bn to bolster its defences, while military and political leaders are supporting the launch of a £100bn Defence Security & Resilience bank for rearmament in the UK and Continental Europe. These are just two of the many signals that highlight how the sector in Europe is at the start of a multi-year transformation.
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Given Europe’s historic underinvestment in defence, the WisdomTree Europe Defence UCITS ETF was created to capture the upside of Europe’s multi-year defence expansion.
Europe has historically relied on US defence contractors for high-end military technology, but policy changes are prioritising domestic suppliers. The European Defence Industrial Strategy (EDIS) is supporting a shift toward locally sourced defence systems, with targets to procure 50% of EU military equipment from European manufacturers by 2030 and 60% by 2035.
“We, therefore, expect European defence procurement to predominantly benefit European companies,” Beso said.
Industrial transformation for defence stocks
This view is reflected in investor appetite for the Exchange Traded Fund, which provides exposure to the European companies likely to be best placed to capitalise on this critical megatrend.
European defence stocks represent an industrial transformation that investors are still adjusting to. The shift in spending patterns, restructuring defence supply chains, and long-term contract backlogs make European defence one of the strongest secular growth stories in today’s market.
According to the European Commission, just a 1.5% GDP increase in defence spending within the EU alone could bring over EUR 325m into the sector.
Related ETFs
 | Europe Defence | Defence LON:WDEF / EUR |     |
