Danske Invest expands its investment universe for defence shares

At Danske Invest we are committed to delivering competitive returns to our investors in a responsible manner and to accommodating their investment wishes and preferences.

We have therefore carried out a review of our investment policies and exclusion lists covering the area of defence in close cooperation with our asset manager Danske Bank Asset Management. The investment policies and exclusion lists govern which companies our funds can invest in.

As a result of the review, we are expanding our investment universe to include a further 30 or so companies, which have consequently been removed from our exclusion lists. This adjustment comes in the wake of several other adjustments made in 2024, and across our restrictions, we have therefore now expanded our defence shares-related investment universe by further including around 200 companies. Among other things, the latest adjustments mean that it is now possible for us to invest in practically all European companies in the defence industry. 

Danske Invest continues to offer funds with no defence shares
Investors, who do not wish to invest in defence shares, can still invest in a number of our different funds, which exclude investments in military equipment.

These include, among others, our funds with sustainable investment objectives and our funds in the Globaali Vastuullinen Salkku product family.*

Get an overview over the exclusions that apply to the individual funds here  

A natural consequence of geopolitical developments
The adjustment of the exclusions is characterised by Erik Eliasson, Head of Responsible Investment at Danske Bank Asset Management, as a natural consequence of the recent years’ geopolitical developments.

“We have seen a markedly sharper focus on the need for stronger defences in Europe, and both the European Commission and the Danish government have highlighted the need for large investments in the defence industry over the coming years. Additionally, we have seen a noticeable change among our investment customers in terms of their general attitude towards investment in defence shares, which has now become a lot less restrictive,” explains Erik Eliasson.

Knock-on effects and investment opportunities
At the same time Thomas Otbo, Chief Investment Officer at Danske Bank Asset Management, points out that defence shares still represent a very small proportion of the global equity market. He also describes defence as a theme that encompasses many elements other than investments in arms manufacturers.

“The geopolitical developments seen during the past couple of months have triggered some large movements in Europe that also have an impact on economic growth and interest rate trends – for instance via the prospects of large debt-financed defence investments in Germany. This also has broader knock-on effects for the equity and foreign exchange markets, which is why defence is a theme that we monitor very closely at multiple levels,” he says.

Updated exclusion lists to follow later this year
The new adjustments to our exclusion lists are expected to be fully implemented in our portfolio during May this year. All investments in defence shares will of course still be carried out within the framework of Danske Invest's Responsible Investment Policy.

For investment-related and regulatory reasons, we cannot at present say precisely which companies will be removed from our exclusion lists as a result of the adjustment of our restrictions. The updated exclusion lists will be published later this year.

Danske Invest’s approach to defence shares
At Danske Invest, we recognise the right of nations to use legal weapons for national self-defence and legitimate national security purposes, as set out in the Charter of the United Nations. Additionally, we respect a series of international conventions in relation to illegal weapons.

We have two types of restrictions on investment in defence shares at Danske Invest:

CONTROVERSIAL WEAPONS: All our funds are subject to our exclusions on controversial weapons that include a number of weapon types that are banned in accordance with international conventions. These are cluster bombs, anti-personnel mines, biological and chemical weapons as well as nuclear weapon activities that are not in accordance with the Treaty on the Non-Proliferation of Nuclear Weapons. The new adjustments to our restrictions related to defence shares mean that we are removing restrictions on various types of weapons that are not banned under international conventions.

MILITARY EQUIPMENT: Some of our funds are subject to stricter exclusions regarding military equipment. This is the case for all our funds with a sustainable investment objective and our funds in the Globaali Vastuullinen Salkku product family. For these funds, combat equipment such as tanks, munitions and missiles are excluded, but other types such as radar systems, military software and surveillance vessels are not. 

• Danske Invest Globaali Vastuullinen Salkku 20, EUR
• Danske Invest Globaali Vastuullinen Salkku 35, EUR
• Danske Invest Globaali Vastuullinen Salkku 50, EUR
• Danske Invest Globaali Vastuullinen Salkku 65, EUR
• Danske Invest Globaali Vastuullinen Salkku 80, EUR
• Danske Invest Globaali Vastuullinen Salkku 100, EUR