Space: the hidden engine powering modern defence
16 SEPT, 2026
Space underpins everything from intelligence gathering to precision strikes. While satellites and orbital assets rarely make headline news, they form the underbelly of today’s military might – enabling real-time surveillance, secure communications and navigation for state-of-the-art weaponry.
Space is more than simply flying to the moon and satellites are no longer just about helping people find their way. “They have become matters of security, economic competitiveness, technological sovereignty, strategic resilience and evolving military operational concepts”, says Stefan Gustafsson, board adviser to the Finserve Global Defence & Security Fund and a veteran of European space strategy.
While eyes are often on the US or high-profile lunar missions, European companies are technically ahead in several critical space defence areas. In Europe, including the UK, innovation in the fast-growing space industry comes from smaller, fast-moving companies offering leading-edge technologies that, when integrated through a systems-of-systems approach, can provide Europe with most of the capabilities needed today.
Some stock examples
There are many examples. Most satellites use electric propulsion and need hours or days to make even a small adjustment to their position or course, but one company, Swedish ECAPS, has developed a faster and more environmentally friendly alternative, and saw its revenue more than double in a year on the back of burgeoning demand. Another, Finish Icey, offering innovative satellite SAR radars, succeeded, like the Swedish world leading high tech Satcom provider Ovzon, by being prepared when demand emerged. Their technology, developed and made available entirely by commercial investments, is ready for further use.
This investment potential was underscored at last week’s International Space Summit in Paris, where President Emmanuel Macron called for "shared governance" of space and urged European nations to work together to strengthen their joint sovereign space capabilities. Macron announced €20 billion in new investments for Europe’s space industry and advocated for the bloc to develop its own crewed spaceflight programme.
Gustafsson says: “Europe stands at the threshold of an unprecedented era in space exploration, possessing the talent, technology and vision to lead important segments on the global stage. From scientific discovery to commercial innovation, the opportunities before us are compelling and transformative.
“Yet, this potential can only be fully realised if European nations move forward together, uniting resources, expertise and ambition under a common purpose – and it involves smaller, fast-moving companies complementing the production capacity of the big industrial actors. Collaboration isn’t simply an option, it is the key to unlocking Europe’s potential in space."
Echoing Gustafsson’s comments, Joakim Agerback, Partner and Lead Portfolio Manager on the Fund says: “National security and defence capability are increasingly seen as preconditions for stable and resilient societies. At the same time, space has become a strategically important domain for communication, navigation, surveillance and to protect other critical infrastructure. The news release about the US having space-based weapons comes as no surprise; space has become an increasingly important defence domain, crucial for modern military capability. To constantly follow this development, we have built an advisory board with deep expertise in defence and geopolitics, alongside a team with long experience across defence, intelligence, security and finance.”
The Finserve Global Defence & Security Fund, which invests in defence and cyber security as well as space, is Europe’s oldest actively managed defence fund and stands out among its peers for several reasons. Launched in 2019, it has a credible long-term track record, with most competing funds and ETFs launched more recently – and it invests globally, not just in Europe. With its multi-cap portfolio, covering large-, mid- and small-cap stocks, the Fund invests in numerous companies that broader index products cannot access. It also offers pure exposure to the defence sector, rather than the diversified industrial holdings typically found in more general defence-related funds.
The Finserve Global Defence & Security Fund has returned 69.74% over the past 24 months and is up 132.15% over the past five years1 2.
1 The stated performance refers to Finserve Global Defence & Security Fund I – SEK R converted to USD. The return over the past 24 months was 69.74% for the period 13 September 2024 to 14 September 2026. The return over the past five years was 132.15% for the period 13 September 2021 to 14 September 2026. Performance is calculated net of fees and with dividends reinvested.
2 Morningstar Medalist Rating, S SEK share class (ISIN LU1822851371): Gold, as of 23 June 2026. The Medalist Rating is a forward-looking assessment and does not guarantee future results. Ratings can change over time. Source: Morningstar.
