ETF Markets Surge in Renewables, Power, Defense, and Shipping
Amid rising geopolitical tensions such as the Iran war, there has been a significant influx of funds into global renewable energy ETFs. In April alone, $3 billion flowed into these ETFs, marking the highest monthly net inflow since 2021, fueled by an 80% oil price surge and the acceleration of renewable investments as countries prioritize energy self-sufficiency.
Domestically, ETFs focusing on electric infrastructure are recording standout performances. The 'KODEX AI Electric Power Core Equipment' ETF led the market with a 65% return over the past month, supported by robust order inflows for companies like LS Electric and Hyosung Heavy Industries. This momentum is reinforced by the U.S.'s infrastructure upgrade needs and ongoing trade tensions with China, creating a supplier’s market for Korean exporters. Conversely, U.S. aerospace and REIT ETFs have experienced downturns amid growing volatility, with the 'TIGER U.S. Space Tech' ETF dropping 12% in a week.
Internationally, Hanwha Asset Management’s PLUS Korea Defense Industry Index ETF (KDEF) achieved a remarkable 214% return over 15 months and was successfully listed on the NYSE. Hanwha aims to expand the ETF to Abu Dhabi and Europe, targeting a tenfold increase in AUM to 100 trillion KRW, while also pivoting toward digital and tokenized assets as part of its next-generation financial strategy.
In the U.S., the BWET ETF—tracking charter rates for very large crude carriers (VLCCs) instead of oil prices—delivered a 1,300% one-year return amidst supply chain disruptions due to the Strait of Hormuz blockade. However, its high volatility warrants caution for short-term investors.
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