Finserve Global Security Fund Monthly Report – June 2026

Space in the Spotlight After Landmark Listing 

Finserve Global Defence & Security Fund declined by 8.50% in June.. The month was characterised by elevated volatility, clear sector rotation and significant capital flows between different market segments. Both the defence and space sectors performed weakly during the month, despite the fact that the long-term fundamental drivers remain intact in our view. Expectations of increased defence investments ahead of the NATO summit are positive, and we have also seen a recovery in the defence sector at the beginning of July. 

The single most significant event during the month was the SpaceX listing, which was historic in terms of both valuation and scale. The Fund chose not to participate in the listing. Although SpaceX is a unique company with a very strong strategic position, we assessed that the valuation was difficult to justify. The Fund has benefited from a strong contribution from the space segment during the year, but in June we saw a clear correction in several space-related holdings. In our view, this was partly driven by capital flows, as investors sold listed space companies in order to free up capital for the SpaceX listing. 

We remain very positive on space as a long-term investment theme. The SpaceX listing has helped increase investor interest in the sector and has highlighted the growing strategic importance of space infrastructure. Satellite communications, earth observation, launch capacity and space-based infrastructure are becoming increasingly important components of modern security, defence and societal resilience. The Fund has clear exposure to space technology within the portfolio.  

The defence sector also experienced significant movements during the month. In Europe, sentiment was affected, among other things, by news regarding Germany’s reassessment of a major frigate programme, which particularly weighed on companies exposed to maritime defence capabilities and shipbuilding. We believe the market reaction was stronger than the fundamental impact justified. Rather than interpreting this as a reduction in defence ambition, we view it as an example of how European governments are seeking to prioritise more cost-effective and more fit-for-purpose solutions. 

Developments in the United Kingdom also illustrate the same theme. The delayed Defence Investment Plan and the criticism that followed show that the market is increasingly focused on execution capacity, financing and clear procurement plans, not only on political ambitions for higher defence spending. In order for the long-term investment case in the sector to fully materialise, both defence companies and procurement authorities need to demonstrate strong execution and the ability to translate increased budgets into actual orders and delivered capability. 

Despite the recent volatility in maritime-related defence companies, we believe maritime security will remain a priority area, not least given the need to protect trade, logistics, critical infrastructure and global supply chains. Although the trend is clearly moving towards increased use of unmanned systems and drones in the maritime domain, we primarily view these as a complement to larger naval platforms rather than a replacement. Larger vessels continue to form the backbone of naval capability by carrying sensors, air defence systems, command-and-control systems and weapons, while unmanned systems can contribute reach, endurance and improved situational awareness. Both will therefore be important components of future naval defence. 

Another factor that contributed to volatility was the increased interest in AI and broader technology companies. During the month, capital flows moved towards the most highly watched areas of the technology sector, while thematic investors reduced exposure in other parts of the market. This affected both space- and defence-related companies, particularly stocks that had performed strongly earlier in the year. 

June was a weak month for both defence and space, but we do not view the movements as a break in the long-term trend. Rather, the development reflected short-term capital flows, sector rotation and a market that has become more selective following a strong period. The Fund’s focus remains on companies that combine structural growth with clear execution capability. We continue to see attractive opportunities within defence, space and cybersecurity, but following the strong performance in several subsegments, selectivity, valuation discipline and technological relevance will be crucial. 

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