In the first half of the year, the Korean stock market was led by the defense and shipbuilding industries, and the notable growth of asset management firms holding exchange-traded funds (ETFs) specialized in defense and shipbuilding as killer products stands out. Shinhan Asset Management and Hanwha Asset Management, which ranked 5th and 6th in the asset management market, recently created their first ETFs with net worth of 1 trillion won, increasing their market share.
According to Koscom ETF check and Korea Exchange on the 1st, 447.4 billion won flowed into Hanwha Asset Management’s "PLUS K Defense ETF" over the past six months. The net worth of this product increased by 362% from 254.9 billion won at the beginning of this year (as of January 2) to 1.1706 trillion won on June 30. The revenue rate compared to the previous year was recorded at 205% as of June 27. Thanks to the influx of large sums, the PLUS K Defense ETF became the first ETF among those introduced by Hanwha Asset Management to exceed a total net worth of 1 trillion won last month.
The PLUS K Defense ETF predominantly includes representative 'K Defense' stocks. It is composed of Hyundai Rotem at 21.2%, Hanwha Ocean at 17.91%, Hanwha Aerospace at 17.68%, LIG Nex1 at 14.71%, Korea Aerospace Industries at 12.92%, Hanwha System at 8.59%, and Poongsan at 4.78%.
Shinhan Asset Management's 'SOL Shipbuilding TOP3 Plus ETF' is also playing a significant role. Its net worth has increased by more than 109% compared to the beginning of the year (as of January 2), and its revenue rate has reached 125%. The total net worth, which was 475.8 billion won until the beginning of the year, has recently surpassed 1 trillion won. The SOL Shipbuilding TOP3 Plus ETF also made its name as the first product among Shinhan Asset Management ETFs to exceed 1 trillion won.
The SOL Shipbuilding TOP3 Plus ETF mainly includes HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean, and Samsung Heavy Industries. A representative from Shinhan Asset Management noted, "While other shipbuilding ETFs often combine shipbuilding and shipping sectors, this product is focused solely on shipbuilding stocks."
It is not an exaggeration to say that the domestic stock market in the first half of this year was led by large-cap stocks in the defense and shipbuilding sectors. Defense stocks were affected by the increase in geopolitical tensions following the Russia-Ukraine war and the Israel-Iran military conflict. Recently, although Israel and Iran agreed to a ceasefire, it is analyzed that the growth trend of defense stocks will continue for the time being as NATO member countries have decided to increase their defense spending.
The shipbuilding stocks had shown weakness for the past decade, but the atmosphere changed with former President Donald Trump's successful re-election late last year. Thanks to Shinhan Asset Management proactively launching the SOL Shipbuilding TOP3 Plus ETF in October 2023, it currently has a significantly larger net worth than similar products from competitors.
Bolstered by the success of the killer products, the market shares of the two asset management firms are growing. According to statistics from the Korea Financial Investment Association, Shinhan Asset Management's market share rose from 3.15% at the beginning of the year to 3.7%. Hanwha Asset Management's market share increased from 1.95% to 2.72%. Both are solidifying their ranks as the 5th and 6th largest in the asset management industry. The scale of ETFs stands at 5.6943 trillion won for Hanwha Asset Management and 7.7642 trillion won for Shinhan Asset Management.