Hanwha Asset Management noted that the net worth of the 'PLUS K Defense' exchange-traded fund (ETF) has surpassed 500 billion won as of the 12th.
According to the Korea Exchange, the net worth of the PLUS K Defense ETF recorded 502.4 billion won based on the closing price as of the 10th. It surpassed 300 billion won on the 11th of last month and exceeded the 500 billion won mark within a month.
The PLUS K Defense ETF has recorded the highest revenue among the more than 900 ETFs listed in South Korea this year. As of the closing price on the 10th, the increase rate reached 82.51%.
The weighting of the PLUS K Defense ETF is largest for Hanwha Aerospace at 23.14%. This is followed by ▲ Hanwha Ocean 19.56% ▲ Hyundai Rotem 16.99% ▲ KAI 15.26% ▲ LIG Nex1 9.21% ▲ Hanwha System 6.98%.
Recent movements by European countries to increase their defense budgets are believed to have contributed to rising expectations for profit growth among South Korean defense corporations. The European Union (EU) recently announced a 'ReArm Europe' plan amounting to €800 billion (approximately 1,258 trillion won).
There is also demand in the Middle East market to replace aging weapons on a large scale, which is expected to lead to various export opportunities. The demand for replacing old weapons in Saudi Arabia and the United Arab Emirates (UAE) alone is estimated to amount to 18 trillion won.
Choi Young-jin, head of the Strategic Business Division at Hanwha Asset Management, said, “This year, we expected the Middle East and the United States to be the main markets for South Korea's defense industry, but with changes in international relations, Europe is emerging again as a significant market, creating additional demand.” He noted, “A golden period for the global defense market is underway, so we should view the defense industry with a long-term perspective.”