Nomura Global Growth Fund on BAE Systems PLC
Thesis
The fund held BAE Systems, a diversified UK defense company, during the quarter. The shares underperformed as tensions in the conflict with Iran eased, showing the position's sensitivity to near-term geopolitical developments. Even so, the fund continues to view defense spending as a compelling multiyear capital-expenditure theme supportive of industrial companies.
“underperformed driven by the easing of tensions in the conflict with Iran.”
Key risks
- Further easing of geopolitical tensions can weigh on defense-sector sentiment