Hanwha Asset Management is drawing strong investor interest with its Korean defense industry ETF products, fueled by growing attention to Korea’s defense industry and its global export potential. The firm recently held an investment seminar in Buena Park to introduce its ETF offerings to Korean investors in the domestic stock market. The March 25 event attracted over 200 participants.
Q. Understanding the ETF Product
A. “An ETF is essentially a fund that trades like a stock,” explained Choi Young-jin, head of marketing at Hanwha Asset Management. While funds are professionally managed, ETFs offer the added advantage of liquidity and convenience. Investors benefit from professional oversight, yet can trade ETFs quickly and easily.
He noted that ETFs also allow for diversified investments across an entire sector, making them more stable than individual stock purchases. As investor interest grows, the ETF market has seen rapid expansion.
Q. Introducing KDEF: Korea’s Defense Industry Fund
A. The Korean defense ETF listed on the New York Stock Exchange, known as KDEF, mirrors Hanwha’s existing “PLUS K-Defense” fund in Korea. The ETF invests in major players in the Korean defense sector, including Hanwha Aerospace, Hanwha Ocean, Hyundai Rotem, and LIG Nex1.
Due to licensing restrictions, Hanwha collaborated with domestic ETF provider ETC to list the fund. Hanwha selects the target companies and provides the index to ETC, following the same structure used in Korea. With defense firms gaining traction, the “PLUS K-Defense” ETF surpassed 500 billion won (approximately $375 million) in net assets as of March 10 and ranked No. 1 in performance among Korean ETFs. This success has fueled expectations for KDEF in the Korean market.
Q. Why Korean Defense Is in Focus
A. Global demand for defense technologies is rising. The defense industry market, valued at $173.1 billion in 2015, is projected to reach $2.69 trillion by 2025. Heightened geopolitical tensions and the integration of advanced technologies like drones and AI have expanded the industry’s scope and future growth potential.
Korea, while currently holding a 2.2% share of global defense exports and ranking 10th worldwide, shows one of the fastest growth rates in the sector. With recognized capabilities in self-propelled artillery, submarines, warships, and fighter jets, Korea’s defense industry—known as K-Defense—is gaining a reputation for reliability, cost-effectiveness, and timely delivery.
Q. A Message to Korean Investors
A. Choi emphasized the broader meaning behind investing in the Korean defense ETF. “This is about more than returns. It reflects the historic transformation of Korea from a war-torn country in the 1950s to a global defense leader,” he said.
He highlighted the symbolic importance of Hanwha, a leading defense company, directly participating in the ETF’s launch in Korea. “This marks a new chapter where Korean defense exports and financial products grow together on the global stage,” he added. Choi urged Korean investors to follow the sector closely, viewing it as a source of national pride and economic opportunity.
By Wonhee Cho [cho.wonhee@koreadaily.com]
