Finserve Nordic AB

Finserve Global Security Fund closed 2024 with a strong annual return of 29.22%, despite a decline of -3.61% in December. During the month, U.S. budget tightening contributed to negative performance in the defense sector, while cybersecurity and commercial aviation performed well, with Cloudflare and Airbus leading as the month’s top performers. The fundamental factors and outlook for the defense and cybersecurity sectors remain strong. Cybersecurity continues to stand out as a clear priority in both defense and corporate budgets, playing a central role in protecting against ongoing hybrid attacks, whether state-sponsored or private.

In 2023, defense investments within the EU rose to a record €279 billion (+10% YoY). The estimated EU defense expenditure for 2024 is expected to reach €326 billion (+17% YoY). European NATO members are now discussing raising defense spending from 2% to 3% of GDP, while Trump recently suggested Europe should aim for 5%. 

Performance by position

 

Negative company-specific news was limited during the month. However, AeroVironment reported a decline in net income and lower earnings per share despite strong sales in its Q3 report. Potential U.S. defense budget cuts could impact companies like CACI, Leidos, and Booz Allen, whose services in the C4ISR segment are likely to face the greatest challenges. 

On the positive side, Italy signed an agreement to purchase up to 24 additional Eurofighter Typhoon aircraft, shortly after Spain’s order for 25 units. The aircraft is produced by the Eurofighter consortium, which includes Airbus, BAE Systems, and Leonardo—all fund holdings. Additionally, BAE Systems, Leonardo, and JAIEC announced a joint venture for the Global Combat Air Programme (GCAP), aimed at developing the next-generation fighter jet by 2035. This represents a significant step forward for the European defense industry and collaboration with the Pacific region.  
 

Finally, the fund would like to honor former U.S. President Jimmy Carter for his significant contributions to human rights and peace during and after his presidency.