Investors are piling into defence stocks as geopolitical tensions and the sector’s strong fundamentals boost performance, new data from GraniteShares the global issuer of Exchange Traded Products (ETPs) with more than $9 billion under management, shows.
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Will Rhind, Founder and CEO at GraniteShares
- GraniteShares 3x Long Rolls-Royce and 3x Long BAE deliver up to 78% returns in a month
Total AUM in GraniteShares 3x Long Rolls-Royce Daily ETP (3LRR) and 3x Long BAE Daily ETP (3LBA) increased during February to nearly £80 million from £44 million and trading activity surged as investors reacted to Government plans to boost defence spending and the performance of the two companies.
The 3x Long Rolls-Royce Daily ETP (3LRR) achieved returns of 78.09% and 3x Long BAE Daily ETP (3LBA) delivered 40.36% last month.
Rolls-Royce’s defence division secured a major win with the £9 billion Unity contract from the UK Ministry of Defence, reinforcing its role in key programmes such as the Typhoon jet engines and nuclear submarine reactors. Rolls-Royce is seeing strong performance in its civil aerospace market.
Manuj Sarpal, Chief Technology Officer at GraniteShares, said: “Growing geopolitical tensions and uncertainty around the Trump administration’s NATO stance have driven European nations to boost defence spending, benefiting firms like Rolls-Royce and BAE Systems.
“Investor confidence in the defence sector is evident but beyond defence, Rolls-Royce is capitalizing on a recovering civil aerospace market, with large engine flying hours surpassing pre-pandemic levels at 102% by late 2024.
“Given the strong fundamentals and shifting geopolitical landscape, there could be further increases in investment in the defence sector in coming days.”
Source: ETFWorld.co.uk
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