According to documents submitted to the Norwegian Financial Supervisory Authority by DNB, Norway’s leading bank is set to launch two new funds: DNB Security & Preparedness and DNB European Defence. The move, as reported by Norwegian E24, involves an actively managed fund and a passive one.
"We are constantly exploring ways to expand the investment opportunities we offer our customers, and we are now seeing an interest in investments in security and preparedness. We also see an increased demand for index funds in general, as well as funds targeting narrower investment universes," said DNB’s Head of Equities, Knut Hellandsvik.
Hellandsvik revealed that they are establishing a "security and preparedness fund" as an index fund linked to a global index. He mentioned that it is still unclear how the fund will invest, and there will be some time before its launch.
"We are also exploring the possibility of creating a similar, actively managed fund focused on Europe," Hellandsvik added, referring to the aforementioned European Defence fund. DNB declined to provide further comments as they are still in the early stages of the launch.
Buzz Around Defense Stocks
Since the beginning of the year, European defense stocks have been skyrocketing. The stock market performance of some of the largest companies has exceeded 30%, with German giant Rheinmetall leading at 118%. Saab’s shareholders have also witnessed a significant increase in the market value of Wallenberg’s defense contractors, with a 72% rise in the stock price just this year.
Here is how the other companies have fared in the upswing:
- Rolls-Royce: 35%
- Thales Group: 77%
- Leonardo: 71%
- BAE Systems: 37%
- Kongsberg Gruppen: 31%
Smaller players with exposure to the defense industry, such as Swedish Mildef Group and Scandinavian Astor Group, have also joined the hype. Astor’s stock has surged by over 130% just this year.
On Tuesday evening, the company announced that they are significantly raising their financial targets and are projecting a revenue of 2.5 billion SEK by 2028.
By tapping into the growing interest in security and defense investments, DNB is positioning itself to cater to the evolving needs of investors looking to capitalize on the booming defense sector. With the launch of these new funds, DNB is poised to offer its clients unique opportunities to access this lucrative market and potentially capitalize on the increasing demand for security and defense-related investments. As the defense industry continues to evolve and expand, DNB’s strategic move could prove to be a lucrative option for investors seeking to diversify their portfolios and tap into this growing sector.