NH-Amundi Asset Management announced on the 29th that it has listed the HANARO Europe Defense ETF, which diversifies investments in leading European defense industry companies, on the Korea Exchange.
The HANARO Europe Defense ETF is a product that invests in major defense companies listed on European stock exchanges, including Rheinmetall, Leonardo, BAE Systems, and Thales. The portfolio includes leading defense platforms and defense technology companies from various European countries. NH-Amundi Asset Management adjusts the ETF's components and their proportions each quarter through regular index rebalancing.
The underlying index is the 'STOXX Europe Total Market Defense Capped Index,' co-developed by Amundi and STOXX. Since Amundi, the largest asset manager in Europe, participated in the index design, the selection and composition of companies more accurately reflect local industry conditions. In fact, Amundi has already listed and managed an ETF tracking the same index on the European stock market in May.
Europe is at the center of a major transformation known as rearmament. The geopolitical risks triggered by Russia's invasion of Ukraine have ushered in an "era of change (Zeitenwende)" in which Europe must strengthen its own defense capabilities.
In fact, the European Union (EU) has announced the 'ReArm Europe' plan, a defense investment program totaling 800 billion euros. At the recent North Atlantic Treaty Organization (NATO) summit, member states agreed to increase their defense spending to up to 5% of their gross domestic product (GDP). As demand for replacing outdated equipment and replenishing inventories has surged, procurement of European-made equipment has expanded, and European defense companies are seeing rapid growth in orders and performance.
This is expected to lead to medium- and long-term investment opportunities. European defense companies are evolving into technology growth stocks by expanding into advanced technology fields such as drones, hypersonic missile interception systems, and network-centric battlefield information systems. The HANARO Europe Defense ETF is the only domestic product that enables efficient diversified investment in European defense companies entering this phase of technological transformation.
Kim Seungcheol, Head of ETF Investment at NH-Amundi Asset Management, stated, "The growth of the European defense industry should be seen not as a temporary geopolitical event, but as a long-term shift driven by increased demand for self-reliant national defense," adding, "The HANARO Europe Defense ETF will serve as a timely investment tool to capitalize on the structural changes brought by Europe's rearmament."
NH-Amundi Asset Management has also published a Europe defense investment guidebook to help investors better understand the sector.
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