What Percentage of Index Funds Hold Defence Contractors? A Data Breakdown
If you own an index fund, you almost certainly own defence stocks. Not because you chose to — but because the indices chose for you.
The S&P 500 alone contains at least eight companies that derive a significant share of their revenue from defence contracts, weapons manufacturing, or military technology. The FTSE 100 and DAX add more. For passive investors who assumed their money was going into "the market" rather than into any specific industry, this is worth understanding.
We scored 15 defence-linked companies across 11 independent ethical dimensions using court filings, regulatory actions, investigative journalism, and NGO reports. The results paint a clear picture: defence companies consistently score among the lowest in our entire database, particularly on the No War, No Weapons dimension.
How Many Defence Stocks Are in Major Indices?
Index funds track a benchmark. They buy whatever the benchmark holds, in whatever proportion the benchmark dictates. The investor has no say in individual holdings.
Here is where the major defence contractors sit across the world's most-tracked indices:
| Company | Ticker | Index Membership |
|---|---|---|
| Lockheed Martin | LMT | S&P 500 |
| RTX Corporation (Raytheon) | RTX | S&P 500 |
| Boeing | BA | S&P 500, DJIA |
| Northrop Grumman | NOC | S&P 500 |
| General Dynamics | GD | S&P 500 |
| L3Harris Technologies | LHX | S&P 500 |
| Huntington Ingalls | HII | S&P 400 |
| GE Aerospace | GE | S&P 500 |
| Textron | TXT | S&P 500 |
| Howmet Aerospace | HWM | S&P 500 |
| Leidos | LDOS | S&P 500 |
| Palantir Technologies | PLTR | S&P 500 |
| Rheinmetall | RHM | DAX 40 |
| Airbus | AIR | CAC 40, Euro Stoxx 50 |
That is at least 10 defence-linked companies in the S&P 500 alone. If you hold a total market ETF tracking the S&P 500, all of these are in your portfolio. The same applies to investors holding FTSE All-World, MSCI World, or similar broad-market trackers.
The Scores: How Defence Companies Perform on Ethical Integrity
We scored each of these companies using our adversarial methodology. The No War, No Weapons dimension measures documented involvement in weapons manufacturing, military contracts, arms exports, and conflict-zone operations — based on public procurement records, export licence data, and investigative reports.
Pure Defence Contractors
These companies derive the majority of their revenue from defence and military contracts.
| Company | Ticker | No War Score | Average Score |
|---|---|---|---|
| Lockheed Martin | LMT | -90 | -19.5 |
| Huntington Ingalls | HII | -90 | -21.8 |
| RTX Corporation | RTX | -80 | -28.2 |
| Northrop Grumman | NOC | -80 | -21.4 |
| General Dynamics | GD | -80 | -22.7 |
| Rheinmetall | RHM | -80 | -22.7 |
| L3Harris Technologies | LHX | -70 | -10.5 |
| Boeing | BA | -70 | -20.9 |
Lockheed Martin and Huntington Ingalls score -90 on No War, No Weapons — the lowest possible range in our scoring system. RTX, Northrop Grumman, General Dynamics, and Rheinmetall follow closely at -80.
No pure defence contractor in our database scores above -70 on this dimension. That is not a matter of opinion — it reflects the volume and nature of documented weapons contracts, arms export records, and military programme involvement found in public sources.
Dual-Use and Defence-Adjacent Companies
These companies generate significant defence revenue alongside civilian operations.
| Company | Ticker | No War Score | Average Score |
|---|---|---|---|
| Textron | TXT | -60 | -12.3 |
| GE Aerospace | GE | -60 | -7.7 |
| Leidos | LDOS | -60 | -11.4 |
| Airbus | AIR | -50 | -9.5 |
| Palantir Technologies | PLTR | -40 | -9.1 |
| Howmet Aerospace | HWM | -30 | -7.3 |
GE Aerospace, Textron, and Leidos score -60 — still deeply negative, but reflecting the mixed nature of their revenue. Airbus scores -50, consistent with its split between commercial aviation and defence divisions. Palantir, which provides data analytics to defence and intelligence agencies, scores -40.
Tech Giants With Defence Contracts
Some of the world's largest technology companies also hold significant defence and intelligence contracts, according to public procurement records. These companies score negatively on the weapons dimension despite their consumer-facing brands.
| Company | Ticker | No War Score | Average Score |
|---|---|---|---|
| Microsoft | MSFT | -60 | +5.5 |
| Amazon | AMZN | -30 | -10.0 |
| Alphabet/Google | GOOGL | -30 | +2.3 |
Microsoft scores -60 on No War, No Weapons, according to our analysis of public procurement data showing significant contracts with defence and intelligence agencies. Its overall average remains positive (+5.5) due to strong scores on other dimensions, including community impact (+50) and environmental performance (+30).
This is a critical nuance: a company can score well on sustainability and poorly on weapons involvement. Traditional ESG ratings, which blend everything into one number, obscure this kind of trade-off. Our 11-dimension approach makes it visible.
The Full Breakdown: Defence Companies Across All 11 Dimensions
Defence contractors do not only score poorly on the weapons dimension. The pattern extends across multiple areas of ethical integrity.
| Dimension | Avg Score (Pure Defence) |
|---|---|
| No War, No Weapons | -80.0 |
| Planet-Friendly Business | -38.8 |
| Honest & Fair Business | -26.3 |
| Fair Pay & Worker Respect | -26.3 |
| Fair Trade & Ethical Sourcing | -23.8 |
| Zero Waste & Sustainable Products | -17.5 |
| Safe & Smart Tech | -16.3 |
The environmental scores are consistently negative. Worker treatment scores are negative across the board. Governance scores are negative for most.
RTX Corporation (Raytheon) carries the worst overall average at -28.2 — the lowest of any company in this analysis. Its scores include -50 on governance, -40 on both environmental performance and tech safety, and -40 on ethical sourcing, on top of -80 on weapons.
What This Means for Passive Investors
The S&P 500 holds approximately 500 companies. At least 10 of them are directly involved in defence contracting. If you hold a total-market S&P 500 tracker, your money is allocated to every single one.
This is not an argument for or against defence investing. It is a statement of fact that many passive investors may not be aware of: buying "the index" is not a value-neutral decision. The index has opinions — or more precisely, it includes companies whose activities span the full range of ethical conduct.
For investors who care about the No War, No Weapons dimension, the data is unambiguous. Defence contractors score between -30 and -90 on this measure, with the pure-play contractors clustered at the bottom.
Knowing what you hold is the first step. Most investors have never checked.
Beyond Defence: The Broader Index Problem
Defence is just one dimension. The same index that holds Lockheed Martin also holds companies with poor scores on data privacy, worker rights, environmental impact, and governance.
Passive investing is built on the idea that you should not try to pick winners. But that philosophy comes with a trade-off: you also cannot avoid the companies whose conduct conflicts with your values — unless you know what you hold in the first place.
See how all 11 values are scored →
View the full company rankings →
How We Score
Every score in this analysis is built from independently verifiable sources: court filings, regulatory actions, investigative journalism, and NGO reports. Companies cannot influence their scores through self-reporting or ESG questionnaires.
We score across 11 independent dimensions — not a single blended rating. A company can score well on environmental performance and poorly on weapons involvement. Both scores are visible. Nothing is averaged away.
Learn more about our methodology →
Check What Is in Your Portfolio
If you hold an index fund, a target-date fund, or any passive investment vehicle, there is a high probability that defence contractors are among your holdings. The question is whether you know which ones — and whether their ethical profile aligns with what you expected.
You can find out in under 60 seconds.