As competition intensifies in the domestic exchange-traded fund (ETF) market, Hanwha Asset Management is expanding its financial territory by exporting South Korea's investment intellectual property (IP) to major financial hubs abroad.
Choi Young-jin, Vice President of Hanwha Asset Management, recently stated, "In the context of geopolitical security threats and U.S.-China hegemony competition, the value of South Korea's defense and key manufacturing sectors has emerged as an irreplaceable bottleneck in the global supply chain. We aim to transform the 'Korea Discount' into a 'Korea Premium' by opening direct investment channels in overseas capital markets."
Hanwha Asset Management is accelerating the final stages of its efforts to list Korean defense and manufacturing ETFs in Europe and the Middle East by the end of the year. Following the successful launch of the Korean defense ETF ('PLUS K-Defense') and manufacturing ETF in the U.S. market, the company is now pushing for listings on the London Stock Exchange, Frankfurt Stock Exchange, and Abu Dhabi Securities Exchange.
Choi pointed out that while the domestic ETF market is fiercely competitive among asset managers, the excellent investment opportunities in South Korea remain largely unknown to foreign investors. He noted that the global supply chain is being reshaped due to U.S.-China competition and security concerns, which has significantly changed the status of South Korea's manufacturing and defense industries. The strategy is to establish a pipeline that allows foreign institutional and individual investors to invest directly in South Korea's key assets through local exchanges without needing to open South Korean brokerage accounts.
He emphasized that 'K-Defense' holds a unique competitive edge in the European and Middle Eastern defense markets. "Since the collapse of the Soviet Union in 1991, the defense manufacturing infrastructure in the West, including the U.S. and Europe, has been reduced, while South Korea has maintained its defense manufacturing capabilities and production capacity across land, sea, air, and space amid constant security threats. Recently, as demand for weapons has surged, European factories have struggled to meet delivery deadlines, whereas South Korea has proven its technology and rapid delivery capabilities in real-world scenarios," he explained.
Choi stressed, "If we can attract even 10% of the largest defense fund in Europe, which is approximately 4.5 trillion won (about $3.8 billion), that would be a significant step in transforming the Korea Discount into a Korea Premium."
In the manufacturing sector, he highlighted the importance of power and energy infrastructure production capabilities, including nuclear power, electrical equipment, and batteries, beyond just semiconductors. He noted that in the context of the AI revolution driving a surge in power demand, South Korea is the only country with both outstanding technology and overwhelming production capacity, excluding China.
Additionally, Hanwha is expanding its reach not only in traditional capital markets but also in the blockchain-based on-chain digital asset market, enabling the trading of Korean indices in tokenized forms (RWA). Choi stated, "We aim to go beyond short-term success and promote South Korea's investment opportunities globally, establishing a foundation for long-term capital inflows."
* This article has been translated by AI.
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