The war in Ukraine has fundamentally altered investor sentiment toward the defence sector across the Nordic region—and nowhere is this shift more evident than in Denmark. Once shunned for ethical reasons, defence and arms-related equities are now among the fastest-growing segments in private and institutional portfolios. Over the past six years, investments in defence stocks have surged more than fifteenfold, transforming companies like Saab, BAE Systems, Rheinmetall, and Kongsberg from obscure industrial names into household investment targets.
From Ethical Taboo to Strategic Asset
As recently as 2019, defence stocks represented less than 0.1% of Danish individuals’ direct equity holdings, according to data from Finans Danmark, the Danish banking and finance industry association. Today, that figure stands at nearly 1.5%—a dramatic shift driven by heightened security concerns and a re-evaluation of what constitutes “responsible” investing in an era of renewed great-power conflict.
“The ethical reservations that once kept many Danes away from defence investments have largely given way to a pragmatic recognition: a strong defence is essential to preserving democracy and stability,” says Lars Gert Lose, CEO of Finans Danmark. “Russia’s full-scale invasion of Ukraine on February 24, 2022—just 1,200 kilometres from Denmark’s southern border—was the turning point.”
The invasion not only dominated headlines but also reshaped national security discourse across Europe. In its wake, defence spending commitments surged, NATO’s 2% GDP target gained renewed urgency, and financial markets responded with unprecedented appetite for defence exposure.
Capital Flows Accelerate
The numbers tell a compelling story. Total Danish investments in defence-focused funds and individual stocks have ballooned from DKK 2 billion in 2023 to DKK 10 billion as of mid-2025—a fivefold increase in just two years. This capital influx has spurred the launch of specialized investment vehicles, with asset managers racing to meet demand.
Maj Invest, a leading Nordic asset manager, launched a dedicated defence and cybersecurity fund in 2023. It now boasts over 20,000 investors and DKK 3 billion in assets under management. “This isn’t just about returns—it’s about values,” says CEO Jeppe Christiansen. “If you believe in a free, democratic Europe, then supporting its defence capabilities is a rational and even patriotic investment.”
Indeed, performance has justified the enthusiasm. The Maj Invest Defence & Cybersecurity Fund delivered a 35% return in 2024 and nearly 20% in 2023, outpacing broader equity indices. Christiansen remains bullish: “We’re not at the end of this cycle. With multiple European nations still below NATO’s 2% defence spending benchmark—and with Ukraine’s needs ongoing—demand for defence technology will remain robust for years.”
Pension Funds Join the Shift
The trend extends beyond retail investors. Institutional players, including major pension providers, have significantly increased their exposure to the sector. Danica Pension, one of Denmark’s largest pension firms, reports a tenfold increase in defence-related holdings over the past three years, now totalling DKK 4.4 billion.
“We’ve seen strong risk-adjusted returns from this segment, which directly benefits our customers,” says Andreas Stang, Investment Manager at Danica. “But we also recognize the ethical complexity.”
Historically, Danica maintained strict exclusions on weapons manufacturers. While those restrictions have been relaxed to allow investment in conventional defence firms—particularly European ones producing fighter jets, naval systems, drones, and precision munitions—the firm still prohibits exposure to controversial weapons such as cluster munitions or anti-personnel landmines.
Moreover, in response to customer feedback, Danica now offers a fully exclusionary investment option for those who object to any defence exposure. A March 2025 customer survey revealed that 62% of respondents agreed or strongly agreed that the Ukraine war had made them more favourable toward defence investments, while 23% remained opposed.
The New Defence Powerhouse Portfolio
Danish investors now routinely hold positions in a core group of European defence champions:
- Saab (Sweden): A leader in fighter aircraft (Gripen), radar systems, and electronic warfare.
- Rheinmetall (Germany): Major producer of armoured vehicles, artillery, and ammunition—recently expanding production capacity to meet Ukrainian and NATO demand.
- BAE Systems (UK): Global defence giant with capabilities in naval ships, combat aircraft, and cyber defence.
- Rolls-Royce Holdings (UK): Critical supplier of propulsion systems for military aircraft, helicopters, and submarines.
- Leonardo SpA (Italy): Key player in military helicopters, surveillance systems, and missile technology.
These firms benefit not only from wartime procurement spikes but also from long-term structural shifts: aging military equipment, NATO rearmament mandates, and the integration of AI, autonomy, and cyber capabilities into modern warfare.
Outlook: Sustained Growth Ahead
Analysts agree that the defence sector’s momentum is far from spent. The European Defence Agency estimates that EU member states will need to spend an additional €200 billion annually by 2030 to meet collective security goals. Meanwhile, U.S. support for Ukraine shows no sign of waning, and new threats—from hybrid warfare to undersea cable sabotage—are driving demand for next-generation defence tech.
“Defence is no longer a cyclical or niche sector,” says Christiansen. “It’s becoming a core strategic allocation in diversified portfolios.”
For Nordic investors, the message is clear: in an increasingly unstable world, investing in security is not just financially sound—it’s a reflection of a new geopolitical reality.
Sources: Finans Danmark, Danica Pension, Maj Invest, European Defence Agency, company filings. Data as of Q3 2025.