In the Fund Check series, fund managers of selected funds look back on developments over the past year and give their assessment of what we can expect in 2026. (Note: Prognoses are not a reliable indicator of future performance. Please note that investing in securities involves risks as well as opportunities.)

Summary

  • ERSTE SECURITY INVEST invests in equities from the defence sector (approx. 50% of the fund's assets), cyber security (approx. 25%) and defence suppliers (approx. 25%).
  • We focus on the core themes of satellites & reconnaissance; drones & industrialisation; sensors, jammers, and defence technology; cyber security; and ammunition.
  • In addition to rising defence spending, we see technological innovation, which should primarily take place in these core themes, as a key driver of the future development of defence equities.
  • Compared to passive ETFs, which mainly weight their holdings according to market capitalisation, we may invest much more flexibly.

Fund manager Bernhard Haas
(c) Samuel Kreuz

Fund & Performance

ERSTE SECURITY INVEST s an equity fund that invests worldwide in companies that make a significant contribution to security-related issues.
In the course of stock selection, shares are selected that are assigned to one or more of the following themes: Defense, Defense Suppliers and Cyber Security. Investments in controversial weapons are excluded.

Note: Please note that an investment in securities entails risks in addition to the opportunities described. Past performance is not a reliable indicator of future performance.

Performance since start of the fund (1.9.2025). The performance is calculated in accordance with the OeKB method. The management fee as well as any performance-related remuneration is already included. The issue premium which might be applicable on purchase and as well as any individual transaction specific costs or ongoing costs that reduce earnings (e.g. account- and deposit fees) have not been taken into account in this presentation.

Commentary by fund manager Bernhard Haas

ERSTE SECURITY INVEST invests in equities from the defence sector (approx. 50% of the fund's assets), cyber security (approx. 25%), and defence suppliers (approx. 25%). In addition to the quality of management and the attractiveness of the products, five core themes are decisive for the stock selection. Companies are selected on the basis of their exposure to these themes and their geographical orientation (focus on Europe and North America).

In our view, these core themes are the most attractive sub-sectors and the most important topics for the future of the defence industry. In addition to rising defence spending, we see technological innovation, which should primarily take place in these core themes, as a key driver of the future performance of defence equities. These core themes are:

  • Satellites & reconnaissance
  • Drones & industrialisation
  • Sensors, jammers, and defence technology
  • Cyber security
  • Ammunition

 

Outlook

The fund is currently invested approximately two-thirds in the United States and one-third in Europe. Although we expect higher growth in Europe, we believe that investing solely in Europe would not cover a large portion of defence spending. This is due to the fact that, according to some estimates, up to 80% of European defence spending is made with US companies, as they currently have a near-monopoly on certain types of weapons (e.g. surface-to-air missiles). We expect this to change in the future and for Europe to catch up in this area, which is why this weighting is likely to shift over time.

Please note: Forecasts are no reliable indicator of future developments.

Compared to passive ETFs, which mainly weight their holdings according to market capitalisation, we may invest much more flexibly because ERSTE SECURITY INVEST is an active product. As specialists in one of the core themes (e.g. sensor technology or space travel), small, innovative companies in particular can launch new products on the market and thus challenge the leading position of established companies. At ERSTE SECURITY INVEST, we are therefore actively searching for these disruptors. We believe that this allows us to identify interesting companies early in their life cycle and thus participate in their strong development. At the same time, this also means that the fund is subject to higher volatility and is therefore only recommended for investors with adequate risk tolerance.

In addition to corporate results, the short-term performance of shares in the defence sector is also determined by the geopolitical situation. Major changes in the status quo, such as a peace agreement in Ukraine, can influence the markets. In the medium term, the increase in defence budgets in NATO countries, especially in Europe, is likely to have a supportive effect. As a result, we expect to see significantly higher growth rates in the long term than in the broader equity market. This would not only justify the current higher valuation but also harbour further upside potential.

Note: Investments in securities entail risks in addition to the opportunities described.

Disclaimer of the management company Erste Asset Management GmbH and its sales agent Erste Bank Group

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. The language of communication of the sales offices is German and the languages of communication of the Management Company also include English.

The prospectus for UCITS funds (including any amendments) is prepared and published in accordance with the provisions of the InvFG 2011 as amended. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in conjunction with the InvFG 2011.

The currently valid versions of the prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key information document can be found on the website www.erste-am.com under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of the Management Company and at the offices of the depositary bank. The exact date of the most recent publication of the prospectus, the languages in which the fund prospectus or the Information for Investors pursuant to Art 21 AIFMG and the key information document are available, and any other locations where the documents can be obtained are indicated on the website www.erste-am.com. A summary of the investor rights is available in German and English on the website www.erste-am.com/investor-rights and can also be obtained from the Management Company.

The Management Company can decide to suspend the provisions it has taken for the sale of unit certificates in other countries in accordance with the regulatory requirements.

Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the indicated fund documents before making an investment decision. In addition to the locations listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at www.erste-am.com.

Our analyses and conclusions are general in nature and do not take into account the individual characteristics of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity for loss, and risk tolerance. Past performance is not a reliable indicator of the future performance of a fund.

Please note: Investments in securities entail risks in addition to the opportunities presented here. The value of units and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your units. Persons who are interested in purchasing units in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is different than the investor’s home currency, changes in the relevant exchange rate can positively or negatively influence the value of the investment and the amount of the costs associated with the fund in the home currency.

We are not permitted to directly or indirectly offer, sell, transfer, or deliver this financial product to natural or legal persons whose place of residence or domicile is located in a country where this is legally prohibited. In this case, we may not provide any product information, either.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of the fund to American or Russian citizens.

It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Thus, this communication is not a substitute for investment advice.

This document does not represent a sales activity of the Management Company and therefore may not be construed as an offer for the purchase or sale of financial or investment instruments.

Erste Asset Management GmbH is affiliated with the Erste Bank and austrian Sparkassen banks.

Please also read the “Information about us and our securities services” published by your bank.