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The defense sector continued to rise in May, with the Global Security Fund returning 12.3% for the month and 34.9% for the year to date. This despite a more subdued global growth picture, with the OECD recently lowering its forecast for global GDP growth in 2025–26 to 2.9%, mainly due to new US tariffs, increased capital costs and weak demand in the US and China.
Safe-haven assets such as gold, defensive equity sectors and absolute return strategies have performed well, while geopolitical uncertainty continues to benefit defense and security companies. At the turn of the month, Ukraine carried out a large-scale drone attack that destroyed or damaged 41 Russian strategic bombers, highlighting the need for advanced air defense in the West as well. At the same time, peace talks between Russia and Ukraine have completely stalled, and there is little indication that Russia has any long-term ambitions for peace talks. Ukraine is adamant about its demand for a complete ceasefire and robust security guarantees.
In Asia, Beijing staked its claim by sending two aircraft carrier groups, about 70 warships and 75 fighter jets around Taiwan in May – the most extensive show of force since 2023.
The combination of subdued global growth, unclear trade policy and rising security threats means that defense continues to emerge as one of the few clear structural growth themes. The Global Security Fund is well positioned to capture that trend.
| May 2025 – Best development | May 2025 – Worst development | ||
| Scandinavian Astor Group | 68,56% | Booz Allen Hamilton | -11,47% |
| Ovzon AB | 56,00% | Okta Inc. | -8,20% |
| IonQ | 46,90% | Invisio AB | -7,36% |
| Exail Technologies | 41,92% | Huntington Ingalls Industries | -3,16% |
| Cloudflare | 37,35% | Fortinet Inc. | -1,81% |
Company-specific news
The Q1 reporting period continued in May and some companies released strong reports that were well received by the market. Among these were smaller European companies that we have added to our portfolio in the spring, which have provided good returns. We take a closer look at three of the companies:
- Astor increased sales by 105 % (of which 38 % organic) to SEK 74.7 million and EBITDA reached SEK 8.1 million (margin 10.8 %). Order intake increased by 111 % and the company now has an order book of approximately SEK 200 million, providing good visibility and supporting continued aggressive growth.
- Clavister reported net sales of 21 % to SEK 53.4 million and a sharp increase in order intake (+190 %), driven by new defense contracts. The company is clearly benefiting from Europe's increased focus on digital sovereignty and cybersecurity.
- Avon Technologies, a new holding in the portfolio, increased sales by 16.8 % to 148.7 million USD and adjusted operating profit by 48.3 % to 17.5 million USD. The company expects continued double-digit growth in 2025 despite an uncertain macro climate.
10x the podcast
Listen to Joakim Agerback's thoughts on the defense sector right now in the 10x podcast: https://open.spotify.com/episode/78tw8xA1fsCkoj9FNfiFsu