Europe's Defense, AI & Quantum Computing - Forces Shaping Markets

As an index provider, how do you approach index construction for a task as broad and far-reaching as thematic indexes?Ladi Williams: Our STOXX thematic framework allows us to capture themes in a systematic and transparent way. Our approach recognizes four different phases in how a theme permeates through society and is based on the diffusion of innovation theory. Those comprise ideation, innovation, commercialization and maturity.The various themes that we cover can be at different stages of progress. That means we adapt the data set or group of indicators we use to effectively capture companies in the index.In the ideation stage, companies are mainly talking about their technology. They haven't actually started any significant product development. When they move away from the ideation stage to the innovation stage is when we might see activity such as intellectual property creation. This is when companies start filing patents and we really begin to see some significant progress.Once those patterns are being used in the R&D stage, it translates into products and services that you can commercialize. That's when you start to see these companies generate revenues and become well established – demonstrating the sort of trends which can be traditionally captured through sector investing.Once a theme grows to become significant to the broader economy, how do you capture its nuances?You can address themes by looking at different parts of the value chain. AI is a good example. There are different areas in the AI value chain, and we target those with different indexes. For some other themes though, it might make sense to only launch one index.As well as the method of targeting multiple sub-themes and launching an index family from those, we are seeing greater specialization in the index itself. Over the years, thematic indices have shifted away from having 150-plus constituents to being more targeted in their exposure. We are seeing a lot of demand for those more specialized indexes from our end clients.Given the level of awareness of some of these themes, such as AI, how do you differentiate your product against other index providers?At STOXX, we prioritize a collaborative approach and don't work in a silo. That means engaging with clients throughout the process and taking their feedback on board continuously.There are then many ways in which you can differentiate on product. As an index provider you must decide whether to focus on a specific segment of the market, or to look across the whole supply and value chain.The way that we look at AI, for instance, is that you have the ‘picks and shovels’ companies that are responsible for building the required infrastructure. Then, on the other side of the value chain, you have companies that are leveraging AI technology or pursuing value integration. They are AI adopters and could include companies that are using AI in healthcare, finance or mobility. We have AI indexes that target those two different areas. We also use a complementary approach, which looks at both.For the theme of defense, we can distinguish on a regional basis. For example, designing a global defense product or a European one, which was a very popular theme in 2025. Drilling further down, differentiation can be achieved by screens, weighting approaches right down to security level caps and counts.How do you see client demand for these products evolving in the coming years?We see thematic indexes being used by a variety of client segments. You have ETF issuers that will use thematic indexes as the investment strategy for their fund. We also work with sell-side institutions that take thematic indexes and wrap them into structured products that have different types of payoffs and where they can embed some principal protection.That shows the level of variation on the product side. Beyond special screens and overlays, and flexible methodologies, a big part of customization and how you differentiate as a provider is data.AI is going to start opening a lot of doors and allow us to create and scale more data sets that we will be able to incorporate into rules-based, systematic and transparent indexes. Only a few years ago, if you wanted to use earnings calls transcripts, or text from company websites or filings, it was very difficult to do that manually.Now, AI tools can scrape these various data points and create data sets from this information. We can then embed those in index strategies. It allows you to push the envelope for what was previously the remit of an active equity analyst doing a lot of research. That is an area where we are going to be seeing a lot more innovation.Visit the panel at Derivatives Forum Frankfurt on 25 February from 15:05-15:50 CETEurope's Defense, AI & Quantum Computing – Forces Shaping MarketsThis session explores three of 2025's most influential thematic trends: European defense, artificial intelligence (AI), and the emerging role of quantum computing. Defense spending and AI have already delivered exceptional performance, driven by structural shifts and transformative innovation. Quantum computing, while still early-stage, is increasingly seen as a strategic enabler – without requiring a complete overhaul of existing systems. The discussion shall highlight strategies, valuation frameworks, and long-term growth drivers for these themes.How is European defense investment impacting European markets?Is there an AI bubble and how are valuations likely to evolve in 2026 and beyond?How are firms thinking about capital allocations in 2026 considering the key trends?Moderator: Matthias Knab, CEO, OpalesqueSpeakers:Ladi Williams, Head of Thematics and Alternative Strategies, STOXXFrederike Bauer, Product Specialist, DWSVaria Pechurina, Director, Lead Institutional Investment Strategist, BlackRockRoxane Philibert, Head of Platform Strategy, Amundi ETF and Indexing, AmundiWeiter zum vollständigen Artikel bei Deutsche Boerse AG Unsponsored American Deposit Weiter zum vollständigen Artikel bei Deutsche Boerse AG Unsponsored American Deposit