The State-Criticality Residual
Does the market price what governments cannot replace?
21 pages · PDF · 20 June 2026 · Licensed single-user copy, watermarked to the buyer
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About this report
European defence equities now trade inside a policy and industrial environment that is structurally different from the one that existed before 2022. Higher defence budgets, larger order books, procurement acceleration and stronger industrial-policy support have already changed the way investors value the sector.
Yet this does not answer the more important question for fundamental portfolio managers: whether markets are pricing strategic irreplaceability itself, or merely capitalising the visible effects of the defence cycle.
Key questions this report answers
- How does the post-2022 policy and industrial environment change the way investors value European defence equities?
- Are markets pricing strategic irreplaceability itself, or merely capitalising the visible effects of the defence cycle?
- What defines the investable universe under a state-criticality lens?
- What is the DFM investment interpretation of the state-criticality residual for fundamental portfolio managers?
Inside this report
- The investment problem
- The empirical logic
- The investable universe
- The DFM investment interpretation
- Bibliography
Who it's for
Strategy, corporate-development and investment teams that need an ecosystem-level view — budgets, industrial capacity and technology landscapes — before committing capital or capacity.
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Methodology, format & delivery
DFM reports are built from primary and official sources — TED procurement notices, CORDIS and the EU Funding & Tenders Portal, EIB operations, the NATO Innovation Fund portfolio, SIPRI data, official budget documents and company disclosures — read together with the underlying legal texts. Sources are cited in the document; it reflects them as of its publication date (20 June 2026). You receive a 21-page PDF, watermarked to you on every page, delivered on the confirmation page and by e-mail immediately after checkout (personal link valid 72 hours, up to 5 downloads). Guest checkout, single-user licence — Terms of Sale.
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