Index description

Universe of Index Components
Stocks
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STEP 1: Initial Universe Filtering:
- Scope: Publicly listed companies domiciled in NATO member states.
- Sector Classification: Companies classified under the Aerospace & Defense sector are excluded (Inrate Sector Classification).
- Market Capitalization Threshold: Only include companies with a market capitalization greater than €150 million as of the latest available data point.
STEP 2: Defense Engagement Screening
To qualify as “defense-adjacent,” companies must demonstrate clear and verifiable involvement with defense entities. A company is eligible if it fulfills at least one of the following criteria:
- Awarded Contracts
Direct participation in defense procurement programs or awarded tenders from ministries of defense, NATO, or EU institutions.
- Supplier / Integrator Status
Identified as a supplier, subcontractor, or integrator in official procurement documentation, public filings, or industry reports.
- Strategic Partnerships or Collaborations
Partnerships with defense agencies or prime contractors for the development, delivery, or maintenance of defense-related technology, products, or services.
- Program Participation
Inclusion in NATO, EU, or national defense programs/projects with a defined commercial role.
Verification:
Engagements must be substantiated through at least one credible source such as company filings, government or procurement databases, press releases, or reputable defense industry publications.
STEP 3: Revenue Materiality Filter
- Companies must derive ≥15% of their total revenue from defense-related activities (based on disclosed figures or vendor-verified estimates).
Companies below the 15% threshold are excluded.
Relaxation Clause: If fewer than 15 companies meet all above criteria, lower the total revenue threshold to 10% to expand the eligible pool and maintain diversification.