KDEF ETF Surpasses 100 Billion Won in Net Assets

Surpassed $70 Million in Net Assets Just 11 Months After Listing
Ranked No. 1 in ETF Returns on the NYSE in the First Half of Last Year

The 'PLUS Korea Defense Industry Index' exchange-traded fund (ETF) surpassed 100 billion won in net assets just 11 months after being listed on the New York Stock Exchange (NYSE).

On January 2, Hanwha Asset Management announced that the PLUS Korea Defense Industry Index (KDEF) ETF had reached 74.68 million dollars (approximately 107.5 billion won) in net assets. The fund posted a 13.99% return over the past six months and a cumulative return of 121.97% since its listing in February of last year.

The KDEF ETF invests in leading Korean defense companies such as Hanwha Aerospace, Hanwha Ocean, and Hyundai Rotem. Hanwha Asset Management participated as the index provider, while the fund is managed by US-based Exchange Traded Concepts (ETC).

The KDEF ETF is the first Korean-branded ETF to surpass 100 billion won in net assets on an overseas stock exchange.

In the first half of last year, it ranked first in returns (excluding inverse and leveraged products) among over 4,300 ETFs listed on the New York Stock Exchange. Such performance by the KDEF ETF is significant in the highly competitive US ETF market.

Currently, the US ETF market is the largest in the world, with assets under management (AUM) totaling 12.7 trillion dollars. Global asset management giants such as BlackRock, Vanguard, and State Street dominate the market. In the past year alone, more than 1,000 new ETFs were listed.

According to global market research firm Morningstar, in the US ETF market, 50 million dollars in net assets is considered the 'minimum viable scale,' and 100 million dollars is regarded as the 'stable operation scale.' Major US registered investment advisors (RIAs) generally prefer funds with assets under management of about 50 million dollars or more. The KDEF ETF has surpassed the minimum viable scale, establishing a foothold on the New York Stock Exchange.

The key factors behind the KDEF ETF's performance are: ▲the rise of the Korean defense industry, ▲ETF convenience, and ▲localization strategies. As the Korean defense industry gains prominence in the global defense market, US investors have taken notice of an ETF that brings together major Korean defense companies. ETC's marketing and distribution strategies tailored to the US market also contributed to the KDEF ETF's success.

Hanwha Asset Management plans to expand its business scope in the global ETF market based on its experience with the KDEF ETF and to establish a foundation for financial exports through collaboration with local partners.

Choi Youngjin, Vice President of Hanwha Asset Management, stated, "The KDEF ETF serves as a case of financial export by providing global investors with a channel to invest in Korea's leading defense companies and attracting capital. We will strengthen global listings to enable investors worldwide to invest in our core products."