KODEX K-Nuclear Power SMR and K-Defense TOP10 Leverage ETFs Newly Listed

Samsung Asset Management is launching two new KODEX ETFs, completing its lineup of shipbuilding, defense, and nuclear power (Shipbuilding·Defense·Nuclear) ETFs, which have become leading sectors in the domestic stock market.

On September 16, Samsung Asset Management announced the new listing of "KODEX K-Nuclear Power SMR," an ETF focused on three leading companies in the next-generation nuclear power small modular reactor (SMR) sector. At the same time, it will also list "KODEX K-Defense TOP10 Leverage," which tracks twice the index return of the KODEX K-Defense TOP10 ETF.

The KODEX K-Nuclear Power SMR ETF is an ETF that invests in companies leading the next-generation SMR and large-scale nuclear power sectors. With the launch of KODEX K-Nuclear Power SMR, in addition to its existing AI power lineup-KODEX AI Power Core Equipment and KODEX US AI Power Core Infrastructure-KODEX has completed a three-product lineup of power ETFs targeting investment demand amid the AI-driven power shortage.

As the competition for dominance in AI, often referred to as a "power-hungry beast," intensifies, the rapidly increasing demand for electricity has brought next-generation nuclear SMRs into the spotlight as a solution. SMRs are drawing attention for their modular nature, which allows power generation to be adjusted according to demand. They are particularly valued by big tech companies that require a constant power supply to operate data centers 24/7. Big tech companies are continuously investing in SMRs. In May, the White House in the United States issued an executive order on advanced reactors, demonstrating its commitment to accelerating SMR deployment.

KODEX K-Nuclear Power SMR invests in key domestic export companies with global competitiveness amid the growing global demand for nuclear SMRs. It is designed to increase SMR exposure by allocating 60% of its investment to three core SMR stocks, keeping pace with global nuclear power trends. The ETF invests in three leading companies: Doosan Enerbility (20%), a major domestic nuclear equipment manufacturer; Hyundai Engineering & Construction (20%), which can construct both large-scale nuclear plants and SMRs; and BHI (20%), a leader in nuclear auxiliary equipment.

KODEX K-Defense TOP10 Leverage is a product that tracks twice the daily return of the KODEX K-Defense TOP10 index, which was listed in July. It is suitable for those who want to more actively follow the characteristics of the defense theme, which responds to geopolitical issues. The product was launched to meet the needs of investors seeking leveraged exposure to the globally sought-after Korean defense industry.

Buoyed by expectations for increased exports driven by rising defense budgets worldwide, the Korean defense industry is regaining growth momentum. KODEX K-Defense TOP10 Leverage invests twice as much in ten leading "real defense" stocks, which have a high proportion of defense sales and strong export performance. This ETF is composed of ten carefully selected stocks, taking into comprehensive consideration the proportion of actual defense sales, the export ratio, and the integration of AI defense technologies, all of which directly impact the share prices of defense companies.

Approximately 80% of the fund is invested in Korea's leading "BIG 4" defense companies driving the growth of the Korean defense industry: Korea Aerospace Industries (KAI), Hanwha Aerospace, Hyundai Rotem, and LIG Nex1. On average, the defense-related sales of the ETF's constituent stocks account for more than 70% of their total sales. The focus is on companies that have proven their competitiveness through defense as their core business, rather than those for whom defense is a secondary operation. This is a strategy to efficiently leverage the Korean defense industry.

Song Ahyun, a manager at Samsung Asset Management, said, "The KODEX K-Nuclear Power SMR ETF is a pure SMR theme ETF that captures both next-generation SMRs and global nuclear export competitiveness," adding, "It is the most intuitive investment tool to capture the global SMR growth trend."

He continued, "Since the KODEX K-Defense TOP10 Leverage ETF tracks twice the index of the KODEX K-Defense TOP10 ETF, it will be an excellent investment product for active investors seeking to benefit from the increase in global defense budgets and the resulting growth of the domestic defense industry."