Defense Spotlight: Inside the Arsenal of The KDEF ETF
Global defense spending reached a record $2.72 trillion in 2024 [1], and while U.S. investors know the likes of Lockheed Martin or Raytheon, one rising force often goes overlooked: Hanwha Aerospace.
As South Korea’s flagship defense and aerospace company, Hanwha has quietly built a portfolio that stretches from aircraft engines to missile systems, satellites, and next-gen military technology. For financial advisors, it may represent both a diversification opportunity and a front-row seat to Korea’s rapidly expanding defense sector.
Engines at the Core
Hanwha is South Korea’s sole producer of aircraft gas turbine engines and has delivered more than 10,000 units across fighter jets, helicopters, and trainers. [2] Through long-standing partnerships with GE, Pratt & Whitney, and Rolls-Royce, Hanwha produces components for aircraft around the world. [3] Today, it is assembling F414 engines for Korea’s KF-21 fighter and aims to develop an indigenous 15,000-lb thrust jet engine by the 2030s - a move that would vault Korea into the ranks of elite aerospace nations. [2][4]
From Missiles to Mechanized Systems
Hanwha’s influence extends well beyond the skies. The company manufactures advanced surface-to-air missile systems, including the M-SAM and L-SAM, which analysts compare to THAAD in capability. Its K239 Chunmoo multiple rocket launcher has become a global export hit, with major contracts in Poland, the UAE, and Saudi Arabia. [5] On the ground, Hanwha’s Redback Infantry Fighting Vehicle recently won Australia’s Land 400 contract, highlighting its growing credibility as a global supplier. [6] Even in emerging tech, Hanwha is innovating with AI-guided anti-tank missiles and unmanned ground systems tested by the U.S. Marine Corps.
Space and Satellite Ambitions
Hanwha is also at the forefront of Korea’s space program. As a system integrator for the KSLV-II (Nuri) launch vehicle, the company helped put a 1.5-ton satellite into orbit. Looking ahead, Hanwha will lead the development of KSLV-III, part of South Korea’s ambitious goal to land a lunar module by 2032. Its acquisition of Satrec Initiative, a specialist in Earth-observation satellites, deepens its space portfolio and positions it within the fast-growing commercial satellite market. [7]
Powering the Future
Beyond traditional defense, Hanwha is investing in eco-friendly naval systems like lithium-ion submarine batteries and hydrogen fuel cells. Its highly automated “smart factories” in Korea, alongside its U.S. aerospace component facilities, show a commitment to advanced manufacturing. [8][9]
From Arsenal to Allocation
For U.S. advisors, Hanwha Aerospace via the Plus Korea Defense Industry Index ETF (KDEF) offer exposure to:
- Diversification: A non-U.S. defense leader positioned in high-growth markets.
- Innovation: Cutting-edge investments in AI, drones, and autonomous systems.
- Global Relevance: Contracts with NATO countries and partnerships with U.S. primes.
- Strategic Tailwinds: Rising demand from Asia and Eastern Europe amid shifting geopolitics.
Target Locked
Hanwha Aerospace has expanded beyond its roots as a Korean defense contractor, building a global presence in aerospace, missile systems, and space technologies, and contributing to the development of next-generation capabilities in these fields. As one of the holdings (as of 8/26/25) in KDEF, it exemplifies the kind of advanced, competitive companies driving Korea’s defense rise.
Fund holdings are subject to change and are not a recommendation to buy or sell any security.
Want to see who else is powering Korea’s defense boom? Stay tuned for the next Defense Spotlight. Explore KDEF holdings here.
Learn more about how Hanwha Aerospace helps power KDEF.
[1] Reuters, World military spending hits $2.7 trillion in record 2024 surge, Reuters.com, 4/27/25.
[2] PR Newswire. Hanwha Aerospace Celebrates Production of 10,000 Military Engines, 4/16/24.
[3] Financial Times, South Korea Seeks to Join Top Arms Dealers with New Fighter Jet Engine, 11/2123.
[4] Asian Military Review, Hanwha Aerospace Wins KF-21 Engine Deal, 6/24/24
[5] The Defense.Info Team, South Korea’s Defense Export Boom, Defense.Info, 6/22/25.
[6] Australian Department of Defense, Land Combat Vehicle System (Infantry Fighting Vehicle), Australian Government, current January 2024, https://www.defence.gov.au/defence-activities/projects/land-combat-vehicle-system-infantry-fighting-vehicle.
[7] Hanwha Aerospace, Korea Goes to the Moon: Hanwha to Lead Korea’s Next-Generation Space Rocket Project, Hanwha Aerospace 5/14/24, https://www.hanwha.com/newsroom/news/feature-stories/korea-goes-to-the-moon-hanwha-to-lead-koreas-next-generation-space-rocket-project.do and Hanwha Aerospace, Hanwha Aerospace Company Profile, accessed 2025, https://www.hanwha.com/companies/hanwha-aerospace.do.
[8] Hanwha, The Role of ESS and Hydrogen Fuel Cells in Maritime Energy Security, 6/20/25, https://www.hanwha.com/newsroom/news/feature-stories/the-role-of-ess-and-hydrogen-fuel-cells-in-maritime-energy-security.do
[9] Hanwha Aerospace USA, Hanwha Aerospace USA, accessed September 19, 2025, https://www.hanwha.com/newsroom/media-library/media-assets/hanwha-aerospace-usa.do
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 1-855-900-0030 or visit our website at www.plusetf.com. Read the prospectus or summary prospectus carefully before investing.
The Fund is distributed by Foreside Fund Services, LLC and Exchange Traded Concepts, LLC serves as the investment advisor of the funds. Foreside Fund Services, LLC is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.
Risk Disclosures:
Investing involves risk, including possible loss of principal. There is no guarantee the Fund will achieve their stated objectives. In addition to the normal risks associated with investing, international investments may involve the risk of capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles or social, economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. The Fund’s concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors.
The Fund’s concentration in a single country or a limited number of countries will increase the impact of, and potential losses associated with, the risks from investing in those countries.
The Fund is non-diversified. The Fund is new and has a limited operating history for investors to evaluate. A new and smaller fund may not attract sufficient assets to achieve investment and trading efficiencies. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility.
The Fund may invest in securities denominated in foreign currencies. Because the Fund's NAV is determined in U.S. dollars, the Fund's NAV could decline if currencies of the underlying securities depreciate against the U.S. dollar or if there are delays or limits on repatriation of such currencies. Currency exchange rates can be very volatile and can change quickly and unpredictably.
The Fund is a recently organized investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. Moreover, investors will not be able to evaluate the Fund against one or more comparable funds on the basis of relative performance until the Funds has established a track record.
One basis point (bps) is equivalent to 0.01%.
