Rocketing to New Heights: How Private Space Development and Defense Momentum Are Fueling a New Era of Growth

SpaceX’s ‘Falcon 9’ launches from NASA’s Kennedy Space Center in Florida, USA. Yonhap News

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The ‘New Space’ era is blooming, in which private companies such as Space Recently, it was revealed that a satellite equipped with South Korea’s Synthetic Aperture Radar (SAR) captured the route of North Korea’s deployment of Russian troops, and investor interest in space technology is growing.

Timefolio Asset Management’s ‘TIMEFOLIO Global Space Tech & Defense Active Exchange Traded Fund (ETF)’ has been recording returns of close to 20% since listing last April. This product is an active ETF that uses the Aerospace & Defense PR Index as a comparison index and invests in leading global companies leading the space and defense industries.

Major stocks included include RTX, a global defense company, Lockheed Martin, a leading global aerospace and defense company, Transdigm Group, Rocket Lab USA, Airbus, and Boeing. There are also many representative domestic companies that are well-received overseas for their outstanding technology, such as Hanwha Aerospace (012450), LIG ​​Nex1 (079550), and Hyundai Rotem (064350).

The World Economic Forum (WEF) predicts that the size of the space economy will reach $1.8 trillion (approximately 2,476 trillion won) in 2035. Accordingly, the world’s leading companies are also putting their lives at risk to secure competitiveness in space technology. Tesla, which unveiled its robotaxi last month, is accelerating the creation of a space internet environment that can be stably connected to complete autonomous driving, and Eli Lilly, well-known to us as an obesity treatment, is also developing new drugs on the Space Station (ISS). We are working hard on development.

This year, as conflicts intensify around the world, the defense industry is attracting attention. This is because space technology is key to advanced weapons and future warfare, such as missile launch, location determination, target detection, and precision strike. Recently, Starlink demonstrated its presence as a space technology by providing space internet services to Ukraine, whose communication network was destroyed due to the Russian invasion.

As geopolitical risks are spreading around the world, not only in Europe but also in the Middle East and China, investors are expected to focus their attention on global defense stocks with space technology. In fact, RTX and Lockheed Martin stock prices have risen 42.09% and 19.81%, respectively, this year alone. The same goes for domestic companies. LIG Nex1’s stock price has risen more than 90% since the beginning of the year, and Hyundai Rotem’s stock price has risen more than 130%. Hanwha Aerospace’s stock price rose by a whopping 186%, making it one of the top five companies in the KOSPI stock price that rose the most this year.

Bae Hyeon-joo, manager of Timefolio Asset Management, said, “As a result of repeated innovations such as rocket reuse, 3D printing, and advanced material development, the time has finally arrived for private companies to monetize. In addition, geopolitical risks such as Russia, Ukraine, Israel, Iran, and Palestine have arrived.” “As it is prolonged, we believe now is the right time to invest in space and defense companies,” he explained.

Another investment point is that Timefolio Asset Management, a renowned active ETF company, is in charge of management. Last month, Timefolio Asset Management successfully included five of its products, including the ‘TIMEFOLIO Global AI Artificial Intelligence Active ETF’, in the top 10 active ETFs with year-to-date returns, proving its outstanding active ETF management capabilities.

Reporter Lee Jeong-hoon enough@sedaily.com

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