EQM Future of Defence Index



In order to be eligible for inclusion in the index, companies must meet the following conditions:

  • The initial Universe is composed of global equities trading on a major global exchange headquartered in NATO+ countries which includes NATO member countries and select major non-NATO allies.
  • Constituent business operations must derive more than 50% of their revenues from the manufacture and development of military aircraft and/or defense equipment (military armored vehicles & tanks, weapon systems and missiles, munitions and accessories, electronics & mission systems, and naval ships), defence technology applications, or cyber security contracting with a NATO+ member nation verified by publicly available contract information.
  • Constituent business operations in cyber security, contracted with a NATO+ member country.
  • Constituents must be at least $1 billion USD in market capitalization with a minimum free float of 20%.
  • Constituents must have an average daily traded value of at least $1 million USD over the last three months.
  • Maximum country weighting is 60% in aggregate.
  • Constituent business operations must be in compliance with United Nation Global Compact (UNGC) principles and Organisation for Economic Cooperation (OECD) Guidelines for Multinational Enterprises as determined by EQM through a review process of publicly available data provided by the company in regulatory filings (such as Annual Reports, 10-Ks, 10-Qs, 20-Fs, 8-Ks), and quarterly earnings reports.
  • Index constituents are weighted according to their free-float market capitalization with a maximum weighting of 5% per component and a minimum position size of 20 bps at the time of rebalance.