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The PLUS Korea Defense Industry Index ETF is a unique international aerospace and defense fund. The ETF seems relatively cheap compared to other industrial ETFs, given the solid fundamentals of the portfolio's underlying holdings. However, the fund's hyper-specific niche does cause it to face some idiosyncratic risks.
Investors are focusing on AI developments in North Asia. China is coming out of more than three years of deflation measured by the producer price index.
Key Takeaways: Defense ETFs now hold $42 billion in assets with $9 billion in inflows this year amid rising geopolitical tensions. Eight out of nine new defense ETF launches since 2025 have been global or international offerings.
VettaFi explores how defense ETFs have expanded beyond traditional contractors into international, space, and drone investment opportunities.
PLUS Korea Defense Industry Index ETF (KDEF) has outperformed peers, tripling in price since inception and delivering 1.5-1.9x higher returns than unleveraged Korean ETFs. KDEF targets South Korean defense stocks poised to benefit from rising global military spending, leveraging advanced manufacturing and rapid order fulfillment capabilities. Despite strong growth prospects, KDEF trades at a significant valuation premium (24x earnings, 10.1x cash flow) versus diversified peer EWY, with higher volatility and liquidity risks.
2025 was a significant year for international investing. Many portfolios keep international exposure in a core sleeve.
One of the most persistent themes this year has been global defense. Historically, it has been an industry that tends to shine when geopolitics drives the macro narrative.
In June, KDEF surged 21.7% as Korean defense exports gained steam, while PLTM soared 23.2% on platinum's tightening supply.
SEC filings for KDEF aren't indexed yet — common for recently launched funds. Browse the issuer's filings on SEC EDGAR directly.