SPADETMDefense Index: Component Selection Rules
Component Selection
The Index includes companies that are involved with the development, manufacture, operation, and support of U.S. defense, military, homeland security, and space operations. This includes companies involved with:
  • The manufacture of military aircraft, helicopters, naval vessels, tanks, armor and armored vehicles, missiles, and munitions
  • Development of C4ISR, network centric warfare, battlespace awareness, simulations and wargaming, and defense informaton technology systems
  • Products for surveillance and reconnaissance; sensors and optics; imagery and analysis, global positioning and navigation equipment, data security & encryption
  • Border control and national/homeland security activities including biometric and screening systems for people and cargo
  • Government space and satellite systems and
  • Commercially-focused space and satellite ventures are included when their activities help to ensure the stability of the infrastructure base of the sector (namely the procurement of satellites, launch vehicles, and ground systems)

Eligibility Rules
To be included in the Index, components must meet the following:
  • Listed on the New York Stock Exchange, American Stock Exchange, or quoted on the NASDAQ National Market
  • Maintain a minimum $100 million market valuation during the 25 days preceding the initial inclusion date.
  • Maintain a minimum $5.00 daily share price during the 25 days preceding the initial inclusion date.
  • Have a minimum average daily trading volume over the preceding 25 days prior to the inclusion date of 50,000 shares.
  • Have a quarterly sales/revenue/turnover of at least $10 million for the prior two announced quarters preceding its inclusion.
The ISBC may at any time and from time to time change the number of issues comprising the Index by adding or deleting one or more components, or replace one or more issues contained in the Index with one or more substitute stocks of its choice, if in the ISBC's discretion such addition, deletion or substitution is necessary or appropriate to maintain the quality and/or character of the industry groups to which the Index relates.
Continued Component Inclusion
Component stocks will typically be removed from the SPADE Defense Index™ under the following conditions at the time of rebalancing:
  • Total market capitalization falls below $75 Million for 25 trading days.
  • The daily trading volume declines below 40,000 shares for the 25 preceding trading days.
  • Last-reported sale price falls below $3.00 per share.
The above requirements notwithstanding, the ISBC reserves the authority to remove one or more component stocks at any time if it believes such stock(s) no longer provide adequate representation of the sector or no longer maintain the quality and/or character of the Index.
 
 

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