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The Global Security Fund rose 3.19 % in April and is up 20.07 % since the beginning of the year. Stock markets recovered after the month's initial decline, but the trade conflict between the US and China continues to keep risk premia high despite a 90-day pause in the tariff war.
The global security situation continued to be characterized by several parallel conflicts. In Ukraine, intense fighting is ongoing around Pokrovsk, while Putin and Zelensky have been invited for the first time to direct peace talks, which will take place in Istanbul on 15 May. In the Middle East, the disruptions in the Red Sea were prolonged when a Houthi missile attack on Ben Gurion on 4 May was responded to with Israeli airstrikes in Yemen. At the same time, border fighting between India and Pakistan escalated before a US-brokered ceasefire came into effect. China increased pressure on Taiwan with extensive military exercises on 1 April, which were followed by the record-breaking US-Philippines military exercise Balikatan.
In the coming weeks, volatility in the sector is expected to be mainly affected by the outcome of the peace negotiations between Putin and Zelensky on a possible end to the Ukraine war. During the month, the fund has further increased diversification through positions in regions such as Korea and Singapore, as well as through more investments in European small-cap companies to reduce regional risk exposure.
| April 2025 – Best development | April 2025 – Worst development | ||
| Redwire | 30,04% | Scandinavian Astor Group | -28,71% |
| Hanwha Aerospace | 27,11% | Airbus | -9,61% |
| Mildef | 24,82 | Cisco | -7,92% |
| CACI International | 24,79% | Northrop Grumman | -4,98% |
| Hanwha Systems | 21,50% | RTX | -4,78% |
Company-specific news
Several leading defense companies in the portfolio have reported first-quarter results in recent weeks. The European companies beat expectations on both the top and bottom lines, while the US companies' results were more mixed and were received with more skepticism on the stock market.
Rheinmetall impressed with a 46% increase in revenue to €2.3 billion and record free cash flow (FCF) of €266 million, driven primarily by a 73% growth in the defense segment. The order book grew to €63 billion. Management confirmed growth guidance of €25–30%, but indicated that this could be increased depending on national defense budgets. Kongsberg continued its strong performance with revenue rising 28% to NOK 14.6 billion, order intake of NOK 20.7 billion and an order book increasing to a record level of NOK 134 billion. The EBIT margin strengthened to almost 20%, driven by robust demand in the missile and marine segments. Airbus managed to offset a minor decline in deliveries (136 aircraft, -4 %) with 6 % higher revenue (13.5 billion euros) and a stable adjusted EBIT of 0.6 billion euros. The order book grew further to 8,726 aircraft, and the target of 820 deliveries in 2025 remains despite continued supplier challenges.
In the US, the picture among the defense giants was mixed. RTX increased sales by 5% to $20.3 billion and adjusted EPS by 10% to $1.47, while the order book reached a record high of $217 billion. Despite the company exceeding analysts' expectations, the share price initially fell by almost 10%, but has since recovered. Northrop Grumman was weighed down by a write-down on a B-21 aircraft, which led to a 7% drop in revenue to $9.5 billion and a halving of EPS to $3.32. The company cut its profit forecast but maintained its sales and free cash flow targets. The stock fell nearly 13% after the report.
Going forward, we remain positive about the sector's long-term opportunities and the fund's diversified strategy should benefit from prevailing uncertainties and continued high investments in defense globally.