Fund managers are starting to reconsider policies that stopped them from investing in defence companies for ethical reasons amid fears of missing out on the massive ramp-up in global security spending that has already sent war stocks on a tear.

Defence stocks are often excluded from environmental, social and governance-focused funds because of their association with weaponry and conflict. But since the European Union committed at least €800 billion ($1.4 trillion) to rearm itself after US President Donald Trump urged the region to take more responsibility, the sector has become too big to ignore.