• European defense spending is rising at a pace not seen since the Cold War.
• Investors must distinguish between broad aerospace exposure and direct exposure to the rearmament cycle.
• The WisdomTree Europe Defense Fund offers targeted exposure to defense contractors.
• The Select STOXX Europe Aerospace & Defense ETF is dominated by commercial aerospace leaders.

The surge in European defense spending may indicate a shift in investor priorities towards thematic conviction over market capitalization. This trend could benefit specialized suppliers and defense contractors, such as Rheinmetall and Saab, which may experience increased demand for their products and services.