UBS's asset management division has become the latest European money manager to lift some restrictions on investments in defense companies as private investors seek to enable their funds to support the region's rearmament efforts.
UBS Asset Management, which oversees $1.8 trillion in assets, has eliminated a ban on certain sustainability funds from backing manufacturers of conventional weapons, according to its latest exclusion policy report published last month.
Germany has also opted to relax some restrictions on defense investments, as European investors reassess their policies in light of escalating geopolitical tensions.
Defense stocks have gained traction this year as European countries, under pressure from U.S. leadership, have committed to increasing military expenditure.
Previously, UBS's sustainable investing and impact funds were prohibited from investing in companies that derived more than 10% of their revenues from conventional military weapons.
Restrictions remain in place for controversial weapons such as cluster munitions and biological weapons.
The Swiss money manager did not provide a rationale for the change in its exclusion policy.
Danske Bank has similarly lifted some restrictions on its asset management division investing in defense assets, as stated in a recent announcement.