New ETF Taps South Korea’s Strategic Manufacturing Sectors

NEW YORK, NY – May 07, 2026 – By Daniel Howard

A new exchange-traded fund (ETF) launched today on the NYSE Arca, offering U.S. investors a specialized vehicle to tap into the industrial heart of South Korea. The PLUS Korea Manufacturing Core Alliance Index ETF (ticker: KMCA), developed by Korean investment giant Hanwha Asset Management and brought to the U.S. market by white-label specialist Exchange Traded Concepts, aims to provide targeted exposure to the country's most strategically vital manufacturing industries.

The fund moves beyond the broad market exposure offered by traditional country-specific ETFs. Instead, it focuses on a curated portfolio of companies central to sectors including Artificial Intelligence (AI) semiconductors, rechargeable batteries, shipbuilding, defense, power infrastructure, nuclear energy, and robotics. This launch comes at a time when global supply chains are being re-evaluated and South Korea’s role as a high-tech manufacturing powerhouse is gaining significant geopolitical and economic importance.

"We are excited to support the launch of this ETF and help bring investors access to some of South Korea's most important and innovative manufacturing industries," said J. Garrett Stevens, Co-Founder and Chief Business Officer of Exchange Traded Concepts, in a statement. He noted that the fund offers a way to participate in "powerful long-term industrial and technological trends."

A Targeted Bet on a Tech Superpower

Unlike established South Korea ETFs such as the iShares MSCI South Korea ETF (EWY), which provides broad exposure to the entire market, KMCA offers a more surgical approach. It is designed for investors who want to specifically bet on the advanced manufacturing and technology sectors that have made South Korea a global leader.

The fund’s underlying index focuses on industries where the country holds a distinct competitive advantage. In AI semiconductors, South Korean firms like Samsung Electronics and SK Hynix are world leaders in memory chips and are aggressively investing in next-generation technologies like high-bandwidth memory (HBM) crucial for AI applications. In the rapidly growing electric vehicle market, a trio of Korean companies—LG Energy Solution, Samsung SDI, and SK On—are dominant forces in the global rechargeable battery supply chain.

Furthermore, the ETF includes exposure to South Korea’s formidable shipbuilding industry, which specializes in high-value vessels like LNG carriers, and its burgeoning defense sector, which has recently secured major export contracts with nations in Europe and Asia for its advanced tanks, howitzers, and fighter jets. By bundling these diverse yet interconnected industries, KMCA presents a unique thesis: that the core of South Korea’s economic strength lies in this alliance of high-tech, heavy-industry champions.

Geopolitics and the 'Trusted Partner' Narrative

The launch of KMCA is deeply intertwined with the current geopolitical landscape. As strategic competition between the United States and China intensifies, corporations and governments worldwide are focused on de-risking their supply chains and forging alliances with reliable partners. South Korea is increasingly positioned as a critical node in this new global order.

Young Jin Choi, CMO of Hanwha Asset Management, highlighted this strategic angle, stating, "Amid intensifying U.S.-China strategic competition and the ongoing realignment of global supply chains, we believe Korea's core manufacturing industries can serve as a trusted and complementary partner within the broader U.S. and allied value chain."

This sentiment is backed by policy. Recent U.S. legislation like the CHIPS Act and the Inflation Reduction Act (IRA) has created powerful incentives for semiconductor and EV battery production in North America or with key allies. South Korean firms have responded with billions of dollars in planned investments for new manufacturing facilities in the United States, cementing the economic and strategic partnership between the two nations. The KMCA ETF, therefore, serves not just as a financial product but as a reflection of this deepening alignment, allowing investors to capitalize on the a trend toward what analysts call "friend-shoring."

A Niche Play in an Evolving ETF Market

The introduction of KMCA also highlights a broader trend in the investment world: the rise of thematic and niche ETFs. As the market becomes saturated with broad-based index funds, asset managers are creating more specialized products that offer granular exposure to specific themes, countries, or industries. This allows for more precise portfolio construction and enables investors to act on specific macroeconomic or technological views.

For Hanwha Asset Management, KMCA represents the second fund in its 'Plus series' brought to the U.S., following a product focused on artificial intelligence. This strategy suggests a deliberate effort to leverage its expertise, particularly in the Korean market, to offer differentiated products that stand out in the crowded American ETF landscape. By partnering with a firm like Exchange Traded Concepts, which handles the complex regulatory and operational aspects of launching an ETF in the U.S., international asset managers like Hanwha can efficiently bring their unique strategies to the world's largest investment market.

However, this specialized focus comes with its own set of considerations. As a new and non-diversified fund concentrated in a single country and specific industries, KMCA carries risks distinct from broader market funds. Its performance will be heavily tied to the fortunes of South Korea’s manufacturing sector and the specific companies within its portfolio. Investors will also face currency risks associated with holding foreign securities. As with any new fund, it has a limited operating history, meaning prospective investors must base their decisions on the fund's strategy and the underlying potential of the sectors it targets rather than a long-term track record.