Launch of Korea's 'NASA'... Hanwha Aerospace ETF Performance Expectations Rise↑

The First ETF Investing in Domestic Aerospace Companies
Hanwha ARIRANG Aerospace & UAM ETF Posts 27.3% Return in the Past Year
Special Act for Aerospace Administration Passed... Policy Benefits Expected

Hanwha Asset Management on the 12th recommended the 'ARIRANG Aerospace & UAM iSelect,' the first exchange-traded fund (ETF) investing in the domestic aerospace industry, as a policy beneficiary product.

With the 'Special Act on the Establishment and Operation of the Aerospace Administration (Aerospace Administration Act),' which serves as the basis for establishing the Aerospace Administration, passing the National Assembly plenary session, aerospace-related companies are gaining attention amid expectations of policy benefits.

The 'ARIRANG Aerospace & UAM iSelect ETF' invests in 18 representative companies related to the aerospace and urban air mobility (UAM) industries among domestic listed companies. Its returns over the past 1 month, 3 months, 6 months, and 1 year were 9.92%, 16.10%, 4.13%, and 27.29%, respectively, outperforming the KOSPI returns for the same periods (0.96%, 5.80%, 0.84%, 8.11%).

The ETF's major constituent stocks include ▲Hanwha Systems ▲LIG Nex1 ▲Hanwha Aerospace ▲Korean Air ▲Korea Aerospace Industries ▲Hanwha ▲Hyundai Motor ▲Hyundai Wia ▲Intellian Technologies ▲RFHIC, among others. The underlying index is the 'iSelect Aerospace UAM Index,' and the total expense ratio is 0.45% per annum.

According to the Aerospace Administration Special Act, the establishment of the Aerospace Administration is expected to be possible in May this year. The securities industry is focusing on the possibility of new budget allocations and is also anticipating policy support related to aerospace.

The Aerospace Administration, which is scheduled to be established under the Ministry of Science and ICT (MSIT), will be responsible for policy formulation, industry promotion, workforce development, and international exchanges in the aerospace sector. It will incorporate the Korea Aerospace Research Institute (KARI) and the Korea Astronomy and Space Science Institute (KASI) as affiliated organizations. The Aerospace Administration will take over space development projects from the MSIT and the Ministry of Trade, Industry and Energy, securing a budget of approximately 720 billion KRW. This is expected to expand to around 1.5 trillion KRW by 2027.

Hanwha Asset Management views the aerospace industry as a 'megatrend' and launched the first domestic aerospace ETF in March 2022. Beyond the government-led investment in the space development industry known as 'Old Space,' the era of 'New Space,' characterized by private-led commercial space development, is approaching. The advancement of low Earth orbit satellite communication services is accelerating, and significant ripple effects are expected across various industries such as UAM and autonomous vehicles.

Choi Young-jin, Head of Strategic Business Division at Hanwha Asset Management, stated, "With the passage of the bill, Korea's aerospace industry has entered a new turning point," adding, "This year, global space companies such as SpaceX and OneWeb are expected to start low Earth orbit satellite communication services in Korea." He continued, "The domestic aerospace industry will also expand in earnest," advising, "Since the aerospace industry is a megatrend with expected long-term growth, it is important to invest with a long-term perspective, observing the direction of industry growth."

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