Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: The Barracuda™ who wrote (64652)

7/22/2025 12:35:24 AM

From: Johnny Canuck

Read Replies (1) | Respond to of 67657

Why the manager of a $2 billion fund is cooling off his European defense investments
Published Mon, Jul 21 2025•7:10 PM EDT

Chloe Taylor @ChloeTaylor141

Share?Share Article via Facebook?Share Article via Twitter?Share Article via LinkedIn?Share Article via Email

A fund manager who oversees assets worth close to $2 billion told CNBC that the European defense bull run may soon begin to cool off as valuations hit “extreme” levels. Speaking to CNBC’s “Europe Early Edition” on Monday, London-based Stephen Yiu, who manages the £1.4 billion ($1.9 billion) Blue Whale Growth Fund , said he had wound down his exposure to the European defense space. Regional defense stocks have seen an extraordinary rise in recent months, fueled by promises from the European Union , regional governments and the NATO military alliance to drastically hike defense spending. The Stoxx Europe Aerospace and Defense index has gained more than 55% since the beginning of the year. Describing the sector as “extremely interesting,” Yiu explained that, around 18 months ago, his fund began a position in European defense that included allocating capital to Italian defense champion Leonardo . However, he also suggested that the spectacular rate of growth among European defense stocks may have peaked. “I think the issue with European defense — even though we continue to like the companies or the sector — is the valuation has been quite extreme,” Yiu told CNBC. Military aircraft manufacturer Leonardo, which the Blue Whale Growth Fund holds, has gained more than 86% so far this year — and it still isn’t one of the sector’s biggest movers. French maritime systems maker Exail Technologies is up almost 500% year-to-date, while German defense giants Renk , Hensoldt and Rheinmetall have all tripled in value. LDO-IT R3NK-FF,HAG-DE,RHM-DE,EXA-FR YTD line European defense stocks While Yiu’s fund still holds Leonardo stock, it has reduced the size of its holding in recent months. He advised investors to consider valuation in terms of outperformance potential, taking into account how long it could take for Europe’s blockbuster fiscal packages to trickle through to corporate earnings. Yiu argued that seeing the direct impact is likely to take “a few years.” “Compared to the beginning of the year [with] Leonardo, you would have seen it in our top 10 holdings, which would be a big conviction, part of our mandate,” he said. “And over the last few months, you haven’t seen it [because] we have actually taken profits.” He also cautioned that the entry point into European defense stocks “is probably not today.” “The question is, would you still be happy to hold on to it just because it could still contribute to some outperformance?” he added. “I think the answer is yes, but I think the easy money has already been made from European defense at this moment in time.”

More in Pro

More In Pro Stock Picks

This big bank stock still has upside ahead despite its 20% year-to-date rally, investor says

Lisa Kailai Han4 hours ago

Best Stocks: What to do with two ‘Best Stock’ names that are failing

Josh Brown

Navigating earnings risk in megacap tech, and a buying opportunity in this industrial name

Frank Holland

Read More?

News Tips
Got a confidential news tip? We want to hear from you.
Get In Touch
?CNBC Newsletters
Sign up for free newsletters and get more CNBC delivered to your inbox
Sign Up Now
Get this delivered to your inbox, and more info about our products and services.
Advertise With Us Please Contact Us

© 2025 CNBC LLC. All Rights Reserved. A Division of NBCUniversal
Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.
Market Data Terms of Use and Disclaimers
Data also provided by

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%