Investment can take on many forms for those entering the trading world, and its diversifying more than ever before. But ongoing economic and political tensions are causing investor appetite to slow down and markets to underperform. But one area of investment that bucks that trend is Defence manufacturing, which has taken great strides forward.
With countries such as America, Russia and China all increasing military spending, investment is gaining appeal. We’ll go into why investing in the military supply market can bring you diversity and profit.
Best Defence investment is a good Offence
One of the reasons for why this market is taking off right now is due to current international security concerns. The ongoing stand-off between the national community over tensions with North Korea is shaping geopolitics in Asia. According to CNBC, President Trump has since called for a further increase in military spending, raising it by another $54bn.
The effect of increased military spending was a year-to-date rise in S&P’s military subsector of 30% with further to come. ETF’s and stocks have seen trading values rise by 40%, with international markets likely to follow.
Question is if international markets will follow this trend
So far, the optimistic jump in trading within arms manufacturing is shown in American and Asian markets. Boeing and Lockheed Martin have seen strong trade in both these markets, and Europes are no exception. In February, European and UK indexes saw strong trade in the wake of US increases to defence spending, trading and manufacturing in strength. Companies such as Avon Rubber and BAE systems are seeing their value surge ahead with growing tensions internationally.
Both have increased by 1.44 and 1.98% respectively in European trading, likely affected by recent developments. Tensions have arisen over Trump’s decision to make Jerusalem the capital of Israel, sparking international outrage.