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The Global Security Fund maintained its positive trend in July, delivering a return of 3.27%. The month was characterized by several geopolitical developments that continue to reinforce the sector’s long-term growth prospects.
In the Pacific region, Exercise Talisman Sabre 2025 concluded on July 28, with over 35,000 troops from 19 nations participating. Papua New Guinea’s involvement for the first time signals growing support for the US-led coalition countering China’s military ambitions. At the same time, Taiwan held its largest ever Han Kuang exercises, involving 22,000 reservists and US HIMARS systems, prompting China to respond by sending 45 fighter jets across the median line in the Taiwan Strait. Regional tensions are thus continuing to escalate.
A strategically important development was the US confirmation of an ammunition plant at Subic Bay in the Philippines, intended to produce 155mm shells and precision munitions. The facility, funded by the US Congress, marks a significant increase in the American presence and will become the largest ammunition depot in the Indo-Pacific region. The project is expected to strengthen defense cooperation between the US and the Philippines, despite domestic political debate.
In Ukraine, the conflict intensified in July, with over 200 battles per day and more than 3,000 drone and airstrikes against Ukrainian targets. On July 28, Donald Trump adopted a tougher stance, reducing his initial ceasefire deadline from 50 days to only 10–12 days, with a new target of August 7–9. If no agreement is reached, comprehensive sanctions and 100% punitive tariffs threaten Russia and its trading partners. Russia has so far rejected diplomatic efforts and continued its offensives, reducing the likelihood of a swift agreement.
These developments confirm the fund’s investment strategy. With NATO’s sharply increased defense budgets, rising tensions in the Pacific, and Russia’s continued aggression, the defense industry is entering a period of historic growth, which continues to benefit the fund’s performance.
| July 2025 – Best Performance | July 2025 – Worst Performance | ||
| AVIO | 27% | SCANDINAVIAN ASTOR | -25% |
| KRATOS | 26% | KONGSBERG | -21% |
| FREQUENCY | 20% | BLACKBERRY | -19% |
| EXAIL TECHNOLOGIES | 20% | PALO ALTO NETWORKS | -15% |
| HANWHA AEROSPACE | 18% | IBM | -14% |
Company-specific news
Several portfolio companies released their Q2 reports during July. Most of the reports were well received by the market.
Rolls‑Royce reported a strong recovery in the first half of 2025, with underlying operating profit of approximately £1.7 billion, up nearly 50% from the previous year. The company also raised its full-year profit forecast to £3.1–3.2 billion, driven by increased demand for jet engines in both civil and military applications and stability in the Power Systems division. The share price reached a record high after the report.
Hensoldt reported a sales increase of around 11% in the first half of 2025 to €944 million, thanks to high demand for optronics for air defense and radar systems. The order backlog reached record levels of around €7 billion, providing the company with excellent visibility for future revenues and reflecting strong underlying demand for its defense technology. The book-to-bill ratio stood at 1.5x, indicating continued robust order intake. The company confirmed its previous full-year sales guidance of €2.5–2.6 billion.
Korea Aerospace Industries increased its Q2 operating profit by 14.7% to KRW 85.2 billion, despite sales declining by 7.1% to KRW 828.3 billion. Net profit rose to KRW 57.1 billion, driven by progress in the KF-21 program and new export contracts for, among other things, the FA-50 to the Philippines and engine deliveries to the US.
Hanwha Aerospace delivered an impressive 156% increase in Q2 operating profit to KRW 864.4 billion, with total sales of KRW 6.27 trillion. The increase highlights the company’s strategic focus on high-margin products and export projects in the aerospace and marine industries.
We look forward to the upcoming quarterly reports in August from some of our larger holdings, such as Rheinmetall and ST Engineering, which will further clarify sector trends.