KODEX Defense ETFs See Individual Net Buying Exceed 100 Billion Won in Two Days

Interest Surges Following U.S. Attack on Iran

As volatility in global stock markets increases due to the war between the United States and Iran, individual net purchases in the two KODEX Defense ETFs, which invest directly in the defense industry, have surpassed 100 billion won over the past two days.

Samsung Asset Management announced on March 5 that individual net purchases in KODEX Defense TOP10 and KODEX Defense TOP10 Leverage ETFs totaled 110.1 billion won over the previous two days. This is interpreted as a result of growing interest in the defense industry following the U.S. attack on Iran on February 28. The current total net asset value of the two ETFs stands at 426.4 billion won.

KODEX Defense TOP10 invests in domestic defense companies that have significant defense segment revenue, a high proportion of overseas exports, and advanced AI-based defense technology. Its main holdings include Korea Aerospace Industries, Hanwha Aerospace, and Hyundai Rotem, among others, with a portfolio of 10 leading defense companies. KODEX Defense TOP10 Leverage is an ETF that aims to double the daily return of the Defense TOP10 Index.

On March 3, the first trading day after the outbreak of the war between the U.S. and Iran, KODEX Defense TOP10 ranked seventh among all ETFs in terms of individual net buying. The following day, March 4, it ranked eighth, reflecting strong investor interest. Over the same period, KODEX Defense TOP10 Leverage ranked seventeenth and sixteenth, respectively, in individual net buying.

On March 3, KODEX Defense TOP10 posted a daily return of 13.3%, ranking third among all ETFs in daily returns, excluding leveraged and inverse products. During the same period, KODEX Defense TOP10 Leverage surged by 28.5%, ranking first in daily returns among all ETFs. In the midst of a sharp decline in the domestic stock market due to concerns over the prolonged war, these ETFs delivered overwhelming returns. Since the beginning of the year, KODEX Defense TOP10 has recorded a 28.91% return, while KODEX Defense TOP10 Leverage delivered a 49.02% return.

With the Russia-Ukraine war still ongoing, global geopolitical tensions continue, and the growth momentum of domestic defense companies is expected to persist. As global defense spending increases, and domestic defense companies are recognized in the international market for their competitive weapon performance and delivery capabilities, the growth trend in the defense sector is projected to continue.

Lee Daehwan, a manager at Samsung Asset Management, stated, "Following the Russia-Ukraine war and now the U.S.-Iran war, global demand for Korean defense has been increasing. We expect that individual investors' interest in KODEX Defense TOP10 and KODEX Defense TOP10 Leverage, which are structured based on actual defense revenue and export ratios among defense companies, will continue."

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