Defence ex-Arms 20
Twenty defence and aerospace names with no exposure to cluster munitions, nuclear delivery systems or anti-personnel mines, weighted by 3-year backlog growth.
Why it won
Defence ETFs almost always pull in the controversial-weapons primes. This index keeps the budget tailwind exposure (ground vehicles, radar, propulsion, MRO, ISR, satellite comms) and strips out the names blocked by most ESG mandates. That makes it usable inside pensions and family-office sleeves that would otherwise have to skip the theme.
The prompt
I want a defence and aerospace index without cluster munitions, anti-personnel mines, biological weapons or nuclear delivery systems. Focus on Western primes and tier-1 suppliers. 20 names, weighted by 3-year backlog growth, max 8% per name.
Methodology
- Universe: developed-market listed defence, aerospace and dual-use suppliers with backlog disclosure.
- Controversial weapons exclusion: cluster munitions, anti-personnel mines, biological, chemical and nuclear delivery systems per ICRC and Norwegian SWF lists.
- Inclusion themes: ground vehicles, radar, ISR, satellite comms, propulsion, MRO, training systems and cyber-defence.
- Weighting: 3-year contracted backlog CAGR, capped at 8% per name, floor of 1%.
- Rebalance semi-annually in April and October when budget cycles are visible.
Backtest
Figures are illustrative for editorial purposes. Past performance does not guarantee future results.
Holdings
| Ticker | Name | Weight |
|---|---|---|
| RTX | RTX Corporation | 8.0% |
| GD | General Dynamics | 8.0% |
| LDO.MI | Leonardo | 7.0% |
| BA.L | BAE Systems | 8.0% |
| RHM.DE | Rheinmetall | 8.0% |
| HII | Huntington Ingalls Industries | 6.0% |
| TXT | Textron | 5.0% |
| HO.PA | Thales | 7.0% |
| SAAB-B.ST | Saab AB | 6.0% |
| HEI | HEICO | 4.0% |
| TDG | TransDigm Group | 5.0% |
| HWM | Howmet Aerospace | 5.0% |
| CW | Curtiss-Wright | 4.0% |
| MRCY | Mercury Systems | 3.0% |
| KTOS | Kratos Defense & Security | 3.0% |
| AVAV | AeroVironment | 3.0% |
| ESLT | Elbit Systems | 3.0% |
| PLTR | Palantir Technologies | 4.0% |
| MOG-A | Moog Inc | 2.0% |
| AJRD | L3Harris Technologies | 1.0% |
Risks
- Heavy exposure to government procurement cycles and political headline risk.
- European primes carry FX translation risk for USD-reporting investors.
- Backlog growth as a weight signal is sticky on the way up and brutal on the way down.
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