Hanwha Asset Management noted that the PLUS Global Defense exchange-traded fund (ETF), which invests in major defense corporations in Europe and the United States, has risen 38% so far this year as of the 14th.
According to the Korea Exchange Information Data System, the PLUS Global Defense ETF has risen 37.60% based on the closing price as of the 12th since the beginning of the year.
PLUS Global Defense is a domestic listed ETF that invests primarily (about 65%) in European defense corporations. In addition to European defense corporations, it also invests in leading U.S. defense corporations such as RTX, Northrop Grumman, Lockheed Martin, General Dynamics, and L3 Harris Technologies.
The stock prices of leading European defense companies held by PLUS Global Defense have recently risen sharply. Since the beginning of the year, the shares of Germany’s Rheinmetall (109.44%), France’s Thales (73.55%), and Sweden’s Saab (66.88%) have surged. This stands in contrast to the negative returns seen in the major U.S. indexes such as the S&P 500 and NASDAQ 100.
The rise in stock prices of European defense corporations is interpreted as a response to Europe’s recent moves to strengthen its own defense capabilities. Following U.S. President Donald Trump’s decision to suspend support for Ukraine, which is at war with Russia, and his actions indicating a close relationship with Russia, Europe has felt a sense of crisis.
Industry experts believe that Europe’s defense industry has entered a long-term growth cycle. On the 3rd, JP Morgan released its 'European Defense' report, forecasting that the increase in defense spending in Europe and the establishment of a supply chain centered on defense contractors within Europe will be key growth drivers. The target stock prices for related corporations were also adjusted upward by an average of 25%.
Choi Young-jin, head of Hanwha Asset Management’s Strategic Business Division, said, "U.S. President Trump is consistently pressuring Europe to raise its defense spending as a percentage of its gross domestic product (GDP) from the current level of around 2% to over 5%. Investors should focus on the global defense industry as a whole, starting with the European defense industry from a long-term perspective."