Hanwha Asset Management announced on the 12th that the net asset value of the 'PLUS K Defense' Exchange Traded Fund (ETF) has surpassed 300 billion KRW.
According to the Korea Exchange, as of the closing price on the 11th, the net asset value of the PLUS K Defense ETF was recorded at 308 billion KRW. Based on data from the financial information provider FnGuide, the performance over various periods shows a year-to-date increase of 35.11%, 24.42% over the past month, and 109.79% over the past year.
This is attributed to the global expansion of defense budgets and the accelerating trend of increased defense spending. Recently, U.S. President Donald Trump, in his speech at the Davos Forum, demanded that European countries raise their North Atlantic Treaty Organization (NATO) defense spending from the current 2% of their Gross Domestic Product (GDP) to around 5%.
Supported by the increase in defense budgets, expectations for expanded exports and new orders for domestic defense industry companies continue to grow. Hanwha Ocean announced in last month's earnings conference call plans to secure maintenance, repair, and overhaul (MRO) contracts for 5 to 6 U.S. Navy ships this year. Last year, Hanwha Ocean secured MRO contracts for 2 U.S. Navy ships.
Hanwha Ocean's stock price has risen 69.48% this year. Additionally, Han No Pevkur, Estonia's Minister of Defense, who recently visited Korea, revealed that they are considering additional procurement of the K9 self-propelled howitzer, indicating ongoing potential for further orders for Hanwha Aerospace.
Strong earnings reports from major domestic defense companies such as Hanwha Aerospace, Hyundai Rotem, LIG Nex1, and SNT Dynamics have also driven the upward trend of 'PLUS K Defense.' Hanwha Aerospace's operating profit last year nearly tripled compared to the previous year, reaching 1.7 trillion KRW. Hyundai Rotem's defense solutions division accounted for more than 50% of its total sales last year.
As of the 11th, the holdings of the PLUS K Defense ETF include Hanwha Ocean (20.69%), Hyundai Rotem (20.59%), Hanwha Aerospace (20.01%), Korea Aerospace Industries (12.73%), and LIG Nex1 (10.70%).
Choi Young-jin, Head of Strategic Business Division at Hanwha Asset Management, stated, "Defense industry sales should consider not only weapon orders and deliveries but also the stability of MRO sales that continue for at least 20 to 30 years thereafter." He added, "K Defense will continue to expand its market position for a considerable period, maintaining a long-term and stable sales growth phase."
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