Over the past two years, the European Union has signaled a clear strategic shift, launching a series of initiatives aimed at restoring the continent’s leadership in a sustainable way.
EUROPE REASSERTS ITS ECONOMIC, GEOPOLITICAL, AND TECHNOLOGICAL LEADERSHIP
EU member states and the European Commission are implementing ambitious plans to strengthen Europe’s competitiveness, security, and autonomy. A landmark step is the Critical Raw Materials Act1, adopted by the EU Council on March 18, 2024. The legislation secures a sustainable supply of critical materials essential for the energy, digital, and defense transitions. Its targets are clear: 10% of annual demand sourced locally, 40% processed in the EU, and 25% from recycling.
The Draghi Report2 (The Future of European Competitiveness, September 2024) highlighted Europe’s economic lag: over 80% of digital technologies are imported, electricity costs are 2–3 times higher than in the US or China, and only four of the world’s top 50 tech companies are European. Former ECB President Mario Draghi issued 170 actionable recommendations to restore Europe’s competitiveness and growth potential.
Other initiatives, including the Clean Industrial Deal3 (February 2025), accelerating decarbonization and industrial innovation, and ReArm Europe4 (March 2025), reinforcing the EU’s defense pillar, underscore Europe’s commitment to reindustrialization and strategic autonomy.
These ambitions are also supported by budgetary tailwinds. Germany’s historic investment plan, announced in March 2025, could add 1–2 percentage points to GDP annually over the next decade5.
Against this backdrop, Edmond de Rothschild Asset Management launched “Mission Europa”, a European equity strategy channeling capital toward the pillars of Europe’s structural transformation: defense, energy, innovation, and the financing of the European productive economy.
LEVERAGING EUROPE’S STRUCTURAL STRENGTHS
Europe benefits from intrinsic and structural advantages: a single market of 449 million consumers, around 32 million businesses6, and a dense innovation ecosystem. The eurozone accounts for 17% of global GDP7, comparable to China (17%) and behind the US (26%), which highlights a significant weight in the global economy.
Despite the recent rally in European equities (MSCI Europe NR +16% from 31/12/2024 to 31/10/2025), valuations remain attractive. On a sector-adjusted basis, European equities trade at 26% discount to US peers, well above the 32-year historical average of 10%, reflecting an attractive entry point for long-term investors8.
Structural growth drivers, including reindustrialization, energy transition, and defense modernization, are also expected to sustain long-term investment demand.
These factors create an environment where diversifying capital toward European assets can deliver attractive performance.
“MISSION EUROPA”: FOUR STRATEGIC INVESTMENT PILLARS
The strategy is designed to reflect Europe’s main priorities:
1. Security: Investing in European defense, cybersecurity, and critical supply chain companies (30–50% of the portfolio; at least 30% in defense companies).
2. Competitiveness: Supporting access to abundant, cost-effective energy and advancing Europe’s decarbonization goals (20–50%).
3. Innovation: Investing in critical technologies, hardware, software, AI, and in workforce development to boost productivity (20–50%).
4. Financing: Contributing to Europe’s €800 billion annual renewal needs via initiatives such as the Union of Savings and Investment, the Banking Union, and securitization (10–30%).
A SELECTIVE AND DIVERSIFIED STRATEGY
The strategy holds 40–50 carefully selected European companies, balancing sector and country exposure. Small & Mid-Caps9 exposure is capped at 40%, while at least 30% is invested in companies within the European Defense Industrial and Technological Base (BITD)10. Among the companies11 in the portfolio that illustrate this approach:
• AVIO: Key player in European space sovereignty (Ariane and Vega launchers) and partner of MBDA in air defense missile production.
• SIEMENS ENERGY: Global leader in energy transition and industrial electrification, including gas power plants and wind turbines.
• BESI: Specialist in semiconductor hybrid bonding technology , crucial for AI chips and memory manufacturing.
• SOCIÉTÉ GÉNÉRALE: Supports SME and mid-sized enterprise financing, asset management, and investment banking solutions across Europe.
With “Mission Europa”, Edmond de Rothschild AM aims to actively support Europe’s structural transformation, at the crossroads of defense, energy transition, and innovation, offering investors both exposure to long-term growth and a role in Europe’s renewed strategic autonomy.
1. Source: European Commission, march 2024: https://www.consilium.europa.eu/en/press/press-releases/2024/03/18/strategic-autonomy-council-gives-its-final-approval-on-the-critical-raw-materials-act/
2. Source: European Commission, september 2024: https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en
3. Source: European Commission, february 2025: https://commission.europa.eu/topics/eu-competitiveness/clean-industrial-deal_en
4. Source: European Commission, march 2025: https://commission.europa.eu/topics/defence/future-european-defence_en
5. Source: Edmond de Rothschild AM Estimate.
6. Source: European Council, February 2025. https://www.consilium.europa.eu/fr/policies/deeper-single-market/
7. Source: IMF, 2024.
8. Source: Goldman Sachs.
9. Small and mid-caps are listed companies with a market capitalization of between €500 million and €10 billion.
10. Source: Edmond de Rothschild Asset Management. Data as of October 31, 2025. A fund's investment policy may change over time.
11. The information regarding securities should not be interpreted as an opinion by Edmond de Rothschild Asset Management (France) concerning the expected performance of these securities, nor, if applicable, the anticipated performance of the price of the financial instruments they issue. This information should not be viewed as a recommendation to purchase or sell these securities.
DISCLAIMER
November 2025.
This is a marketing communication.
This document is issued by the Edmond de Rothschild Group. It has no contractual value and is designed for information purposes only. This material may not be communicated to persons in jurisdictions where it would constitute a recommendation, an offer of products or services or a solicitation and where its communication would therefore contravene applicable legal and regulatory provisions. This material has not been reviewed or approved by any regulator in any jurisdiction.
The figures, comments, opinions and/or analyses contained in this document reflect the Edmond de Rothschild Group's view of market trends based on its expertise, economic analyses and the information in its possession at the date of preparation of this document and may change at any time without notice. They may no longer be accurate or relevant at the time of publication, particularly in view of the date of preparation of this document or due to market developments.
This document is intended solely to provide general and preliminary information to those who consult it and should not be used as a basis for any investment, disinvestment or holding decision. The Edmond de Rothschild Group shall not be held liable for any investment, disinvestment or holding decision taken on the basis of such comments and analyses.
The Edmond de Rothschild Group therefore recommends that all investors obtain the various regulatory descriptions of each financial product before investing, in order to analyse the associated risks and form their own opinion independently of the Edmond de Rothschild Group. It is recommended to obtain independent advice from specialised professionals before entering into any transaction based on the information contained in this document, in order to ensure that the investment is suitable for the investor's financial and tax situation.
Past performance and volatility are not indicative of future performance and volatility and are not constant over time and may be independently affected by changes in exchange rates.
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