Rearmament as a secular budget line: primes, shipbuilding, aero suppliers, defense IT and software, and the commercial aero duopoly’s troubled half. Geopolitical risk-on basket — it works when nothing else does.
Basket total returns · Annualized using 252 trading sessions · 0% risk-free rate and downside target. As of 2026-10-16 · close.
How these statistics are calculated
Risk methodology
Sharpe: average daily simple return divided by its sample standard deviation, multiplied by √252. The risk-free rate is assumed to be 0%; this is not a cash-adjusted ratio.
Sortino: average daily simple return divided by downside deviation, multiplied by √252. Downside deviation is the square root of the average squared shortfall below 0%, counting all sessions, including zeros for gains.
Historical volatility: √(252 × average squared daily log return), matching the Vol page’s realized-volatility convention. This differs from the sample standard deviation used in Sharpe.
Each period requires complete history and at least 5 sessions. MTD and YTD follow the calendar; 1y is 252 sessions. Missing data or an undefined ratio displays — with a reason. Short periods can produce unstable ratios; intraday snapshots include a partial session. History before this basket’s creation is backtested. If a new basket has no stored daily return series yet, estimates from its rounded published chart levels are marked ≈.
Basket returns include dividends. “vs S&P 500” compares the basket’s compounded growth with the benchmark’s. Green means positive; red means negative.
Cross-checked against ITA. Daily return correlation: 0.95 across 1707 sessions. cap-weighted vs our equal weight; otherwise a close universe match
Membership history & changes
Membership history
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FW 3000 pass: added HEI, CW, CACI, BAH, SAIC, KTOS, AVAV, RKLB — names outside the S&P 500 but inside our broad universe; they count only in the FW 3000 version of this basket. Effective-dated to creation so the broad backtest covers the full set. The S&P 500 basket is unchanged.
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Widening pass: added the defense-IT/software leg (LDOS, PLTR), public-safety tech (AXON), and Textron — the full S&P 500 aerospace & defense sub-industry plus software. Reference pinned to ITA. New members are effective-dated to basket creation so the backtest and the reference correlation cover the widened set (the basket was one day old, with no meaningful live history to restate).
Orbit as an industrial buildout: launch costs down an order of magnitude, broadband and direct-to-device constellations, Earth observation, lunar programs, and a defense budget pivoting toward resilient space architectures and missile defense. No S&P 500 pure play exists, so the S&P leg is primes with major space segments — diluted by design; the pure plays across launch, constellations and in-space infrastructure live in the FW 3000 version. High-beta and long-duration: the basket is a read on risk appetite for the theme as much as on the theme itself.
Factories coming home: automation, electrical content, construction equipment and rental, distribution, heavy-side materials, and the domestic steel that feeds it. The fiscal-industrial policy trade — IRA, CHIPS, and tariff walls in one basket.
Software businesses positioned to monetize AI through existing distribution: copilots attached to installed bases, agent platforms, and the EDA/design tools that themselves get an AI productivity kicker. The bet is that distribution beats model quality.