Analysis of the Finserve Global Defence & Security Fund I EUR
16 OCT, 2026
By Xiaoying Zhou from RankiaPro
Few equity themes have been repriced as quickly as defence. The I EUR class gained 52.1% in 2025. After a strong start to 2026, the Finserve Global Defence & Security Fund (LU1822851702) has consolidated and stood broadly flat for the year at the end of September.
That makes it a useful moment to test the thesis. The question is no longer whether budgets rise, but whether order books turn into deliveries and margins.
Fact sheet
Investment thesis
The fund is a global thematic equity strategy focused on defence, aerospace and security, including cyber and homeland security. The prospectus requires at least 51% in listed defence and security equities, with the rest in adjacent areas such as space, critical infrastructure and resilience technology. It is a Luxembourg UCITS managed by Stockholm-based Finserve Nordic AB.
The backdrop remains supportive. SIPRI estimates world military expenditure at $2,887bn in 2025, up 2.9% in real terms, the eleventh consecutive annual rise and 2.5% of global GDP. NATO's 5% defence investment framework anchors European demand over several years, while Asia-Pacific budgets are growing faster than the global average (SIPRI).
What sets the fund apart is geographic breadth. Many defence products concentrate on European primes or US contractors. This one holds meaningful positions across South Korea, Japan, Taiwan, Singapore and Australia, and allocates between 10% and 25% to small caps. As a result, its returns can follow a different path from more concentrated defence funds.
Investment process and management team
Finserve Global Defence & Security Fund combines top-down analysis of structural growth trends with fundamental company research and systematic portfolio management. The investment process begins with an assessment of geopolitical developments, defence budgets, procurement programmes and long-term capability requirements. Companies are then evaluated based on their market positioning, growth prospects, financial strength, valuation and contribution to portfolio diversification. Quantitative screening supports company selection and ongoing risk management.
The strategy is led by Joakim Agerback, Lead Portfolio Manager, alongside two analysts. The investment team is supported by an Advisory Board chaired by Karl Engelbrektson, former Chief of the Swedish Army, providing specialist insights into geopolitical developments, defence procurement and military capability priorities. The Advisory Board contributes to strategic and sector assessments, while investment decisions remain the responsibility of the portfolio management team.
Launched in 2019, the fund is an actively managed, long-only, multi-cap equity strategy investing across defence, cybersecurity and space. The portfolio is diversified across companies, subsectors and geographic markets, with an emphasis on businesses positioned to translate structural demand into sustainable earnings and cash flow. The fund's longer performance history is represented by its SEK share classes, while its EUR share classes were launched in April 2024.
The portfolio looks consistent. At the end of 2025 the fund held 69 listed equities, was fully invested, owned no other funds and had no position above roughly 4%. There is no drift into broad technology: cyber and quantum names remain secondary to platforms, munitions, naval and space suppliers.
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Performance and risk analysis
The I EUR class rose from EUR 107.53 to EUR 163.60 per share in 2025, a gain of 52.1%. European primes drove the first half and space and technology the final quarter, supported by a favourable backdrop for the whole sector.
2026 has been more mixed. The R EUR class, the only class shown in the September factsheet, gained 16.19% in January before consolidating over the summer. As at 13 October 2026 it stands 0.32% down year to date, compared with a 12.12% gain for the World Equity Index TR at the end of September. Its worst month (-11.10%) and maximum monthly drawdown (-15.72%) reflect the higher volatility typical of a thematic strategy. The I EUR class, with lower fees, should sit slightly above these figures.
On risk, the KID rates the class SRI 4 out of 7, and the prospectus targets long-term investors able to accept temporary fluctuations. As the EUR classes are relatively recent, a 36-month Sharpe ratio is not yet available. The factsheet reports a beta of 0.88 against the World Equity Index TR, while manager data cited by Rankia point to a lower figure (0.26 against the MSCI World), based on daily data over the last three years.
On costs, the I EUR class is clearly the more efficient access point: 0.87% ongoing charges plus 0.15% transaction costs (KID), against a 1.60% investment management fee alone on the R EUR class. There are no entry, exit or performance fees, and the minimum initial investment is EUR 250,000 (prospectus).
Current positioning
The portfolio is broadly diversified by name and focused by theme. Traditional defence forms the core, with space and cyber security as complementary allocations. Holdings range from large primes to smaller companies listed in Stockholm, Seoul and Tokyo, which add a small-cap growth component. The implicit tilt towards growth and momentum is consistent with the summer consolidation.
Two exposures are worth highlighting. The first is Asia-Pacific, which weighs more in the audited year-end portfolio than the rounded factsheet split suggests, with South Korea the largest country after the US. The second is currency: most assets are priced outside the euro, which adds a degree of currency diversification for EUR investors.
ESG and sustainability analysis
The fund is classified under Article 8 SFDR: it promotes environmental and social characteristics without a sustainable investment objective. In practice, ESG is built on norms-based screening: controversial weapons exclusions, a bar on Russian and Chinese defence companies and a six-monthly exclusion list. The 2025 periodic disclosure reports no UN Global Compact violations and shows room for progress on compliance-monitoring processes at investee companies (annual report). The approach is coherent with the portfolio and centred on exclusions.
Main potential risks
| Risks | Description | Mitigating factors |
|---|---|---|
| Thematic concentration | At least half of the portfolio is invested in defence and security, so a sector-wide derating can weigh on returns regardless of stock selection. | Around 70 holdings across several regions, with no single position above roughly 4% at the end of 2025. |
| Budgets and execution | Delays in defence budgets or in converting orders into deliveries could hold back earnings growth at portfolio companies. | Multi-year contracts and large order books give visibility, and exposure is spread across European, US and Asian procurement cycles. |
| Small-cap liquidity | Some holdings are small and micro caps that may be harder to trade in volatile markets as assets grow. | The prospectus caps small caps at 25% of net assets, and the core of the portfolio is in liquid large caps. |
| Team and growth | A focused team manages a sub-fund that has grown rapidly, so continuity of the team is a point to monitor. | Support from a specialist advisory board, plus oversight from an independent management company and depositary. |
Summary and assessment
The Finserve Global Defence & Security Fund I EUR offers a differentiated way to access rearmament: global, multi-cap and with genuine Asian exposure. For professional investors with a five-year horizon, it fits as a satellite position alongside core global equities, not as a core holding.
Its value lies less in protection against geopolitical shocks than in exposure to a multi-year investment cycle in defence. The 2026 consolidation has eased valuations and is a reminder that thematic strategies can follow a different path from broad markets.
Points to monitor include the pace of defence budgets, order conversion, team stability and capacity management as assets continue to grow.
This analysis has been prepared on the basis of public information available as at 30 September 2026, including the prospectus, factsheet, key information document and annual report provided by the management company. It does not constitute investment advice or an offer to buy or sell units. Professional investors should carry out their own due diligence. Past performance is not a guarantee of future returns.
