PLUS Korea Defense Industry Index ETF

The PLUS Korea Defense Industry Index ETF (KDEF) holds about 20 South Korean defense companies. It tracks the Korea Defense Industry Index, which uses an AI language model to score how closely each company is tied to defense. The fund is heavily concentrated, with Hanwha Aerospace at about 23% of assets as of August 31, 2026. Its 0.65% expense ratio is higher than the 0.50% charged by the much larger Global X Defense Tech ETF (SHLD).

• Over the year to Oct 27, 2026, KDEF returned -26.8%.
• The deepest fall in its price history was 48.4% (May 5, 2026 to Jul 29, 2026), not yet recovered.

As of Aug 31, 2026, the fund held 20 securities; the ten largest made up 70.36% of assets.

• Over the three months to Aug 31, 2026, investors withdrew a net $21.9M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -20.17%, -5.18%, +12.85%.

KDEF aims to match the Korea Defense Industry Index before fees and puts at least 80% of its net assets in index stocks. The index starts with stocks in Korea's KOSPI and KOSDAQ indexes that fall into industries such as aerospace, shipbuilding, rail cars, steel, vehicles and satellite telecommunications. Each company needs a market value of at least 300 billion won (about $220 million as of March 3, 2026) and enough daily trading.

Next, a large language model (an AI program) searches filings, earnings reports, company presentations and news for defense keywords and scores each company's relevance. Stock weights are set 70% by market value (market capitalization) and 30% by that score. A finalist must earn more than half its revenue from defense-related work, or the next-highest scorer takes its place. The index targets 20 stocks, caps each at 20% and rebalances every quarter. Between rebalances a stock can grow past the cap: Hanwha Aerospace stood at about 23% as of August 31, 2026.

The fund is "non-diversified," which means it can hold more of a single company than a typical fund. Hanwha Asset Management owns the index, Akros Technologies designed and maintains it, and Solactive calculates it. The prospectus notes the index may include companies affiliated with Hanwha Asset Management. The fund can also create and redeem shares for cash, which may make it less tax-efficient than ETFs that do this in kind.

• KDEF charges 0.65% a year, versus an average of 0.5% for the similar funds below.
• Using the prospectus's standard example, $10,000 invested would cost about $66 in the first year and $810 over 10 years (assuming a 5% annual return).

KDEF is a young, 20-stock, single-country fund focused on one industry, and its price swings have been large.

KDEF adds a narrow bet on South Korean defense companies. It launched on February 5, 2025, so it has no record through the 2008, 2020 or 2022 downturns and no full calendar year of results. Its short history has already been rough. The fund fell 48.4% from May 5 to July 29, 2026, and had not recovered as of October 27, 2026. Over the year to that date it lost 26.8%, with volatility of 55.4% and a beta of 2, meaning it swung roughly twice as much as the market. Someone who needs cash in a bad year could have to take money out near a low. The trailing 12-month yield was 8.86% as of October 27, 2026, paid quarterly, but past payouts may not repeat. In the SEC's $10,000 example, costs come to $66 after one year. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).