Hanwha takes Korean defense, manufacturing ETFs to Abu Dhabi

First Korean asset manager to list ETFs in Middle East on Nov. 2, with European expansion also planned.

Hanwha Asset Management is set to become the first Korean asset manager to list exchange-traded funds on a Middle Eastern exchange, taking two US-listed products tracking Korea's defense and manufacturing sectors to Abu Dhabi as it seeks to build a global investor base.

The company confirmed to The Korea Herald on Friday that it plans to cross-list its PLUS Korea Defense Industry Index ETF (KDEF) and PLUS Korea Manufacturing Core Alliance Index ETF (KMCA) on the Abu Dhabi Securities Exchange on Nov. 2.

The move represents a new phase in Hanwha's overseas strategy: Rather than establishing local asset management operations, the company is using existing US-listed ETFs to enter additional markets, with Europe next on its agenda.

Both funds currently trade on NYSE Arca and are managed by US-based Exchange Traded Concepts, with Hanwha supplying their underlying indices. The structure allows the Korean firm to extend distribution across markets without directly operating the funds overseas.

The planned Abu Dhabi listings also reflect Hanwha's efforts to tap Middle Eastern demand for exposure to Korean industries, particularly defense, shipbuilding and advanced manufacturing, as economic and investment ties between Korea and the region deepen.

KDEF, launched in February 2025, invests in major Korean defense companies including Hanwha Aerospace, Hyundai Rotem, Korea Aerospace Industries and LIG Nex1.

Its assets surpassed $200 million within 15 months of launch but have since declined to $93.47 million, despite a market-price return of 112.75 percent since inception.

KMCA, launched in May 2026, tracks Korean manufacturers across six sectors: AI semiconductors, rechargeable batteries, shipbuilding, defense, power grids and nuclear energy, and robotics. The fund currently manages $4.98 million.

The relatively modest asset bases, particularly for KMCA, highlight the commercial challenge ahead. While cross-listing can expand investor access, sustained growth will depend on whether the products attract meaningful demand and trading activity in their new markets.

Global ambitions without local operations

Hanwha is pursuing overseas expansion through a white-label ETF model, under which it develops investment strategies and indices while ETC handles fund management and operations.

The arrangement reduces the cost and regulatory burden of entering overseas markets compared with establishing a local asset management business.

“Financial markets are global, but investment opportunities remain highly localized, and our role is to connect the two,” said Choi Young-jin, chief marketing officer and executive vice president of Hanwha Asset Management. “KDEF and KMCA are more than ETFs — they package Korea’s strengths in defense and manufacturing into investment opportunities for global investors,” he added.

The Abu Dhabi expansion builds on Hanwha Group’s existing Middle Eastern business ties, particularly through defense affiliates Hanwha Aerospace and Hanwha Systems. Unlike those industrial operations, however, the asset management initiative aims to channel regional capital into Korean equities.

“The best investment ideas have limited value if investors cannot access them. Our goal is to bring Korean investment ideas to global investors,” Choi said.

Hanwha is also exploring European expansion, including potential listings in London and Frankfurt and the establishment of an Ireland-domiciled UCITS ETF structure for distribution across European markets.

The strategy could allow Hanwha to broaden its international reach without committing substantial capital to overseas subsidiaries. Whether that reach translates into significant new investment flows will be an important test of its global ambitions.