Hanwha Asset Management Launches Korea's First Defense Industry Investment ETF 'ARIRANG K-BangsanFn ETF'

Investment in Hanwha Aerospace, Hyundai Rotem, KAI, Hanwha Systems, etc.
Proven defense technology and active government support forecast strong exports this year as well

[Asia Economy Reporter Kwon Jae-hee] Hanwha Asset Management listed the 'ARIRANG KbangsanFn ETF' exchange-traded fund (ETF) on the Korea Exchange on the 5th. It is the first domestic ETF that allows investment in the growth potential of the domestic defense industry and the first new ETF introduced by a domestic asset management company this year.

The 'ARIRANG KbangsanFn ETF' invests in 10 representative companies engaged in the defense industry among domestically listed companies. Major constituent stocks include ▲Hanwha Aerospace ▲Hyundai Rotem ▲Korea Aerospace Industries (KAI) ▲Hanwha ▲LIG Nex1 ▲Hanwha Systems ▲Poongsan ▲SNT Motiv ▲Firstec ▲Huneed, which produce Korea's representative weapons such as the K9 self-propelled howitzer, K2 tank, and FA50 light attack aircraft.

Amid the Russia-Ukraine war, the importance of self-reliant defense has been highlighted worldwide, and last year, South Korea's defense industry export orders reached a record high. Poland, which shares a border with Ukraine, reinforced its defense gap caused by war material support by ordering about $12.4 billion worth of weapons from South Korea.

This year, the export growth trend of domestic defense stocks is expected to continue. Additional orders are anticipated from Europe, Southeast Asia, Oceania, and other regions. As countries around the world strengthen their defense capabilities, the number of countries seeking South Korean defense materials is significantly increasing.

Kim Seong-hoon, Head of the ETF Business Division at Hanwha Asset Management, said, "The global trend of countries emphasizing self-reliant defense is favorable to the defense industry, and we believe that Korea's defense industry is suitable for investment in growth as it has a clear roadmap for entering new and advanced markets." He added, "The government's will and active support to foster the defense industry as a national strategic industry are also positive factors for the increase in exports of domestic defense companies."

Meanwhile, Hanwha Asset Management plans to continue proactive efforts to create customer value in 2023, starting with this Kbangsan ETF. Depending on changes in the investment environment, they are preparing to expand the ETF lineup to include not only stocks but also bonds and multi-assets, and plan to introduce bond-type ETFs such as comprehensive bond ETFs and ultra-long-term bond ETFs in the first quarter.

This content was produced with the assistance of AI translation services.