Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Korea's ETF market overtakes Kosdaq for 1st time
The KOSPI and Kosdaq indexes are displayed in the dealing room of Hana Bank in Seoul, Friday. The benchmark KOSPI closed at 8,411.21, down 5.81 percent from the previous session, while the secondary Kosdaq closed at 851.37, down 4.1 percent. Yonhap
By Lee Yeon-woo
The domestic exchange-traded fund (ETF) market overtook the Kosdaq in market capitalization for the first time last week, data showed Sunday, ahead of the Kosdaq's 30th anniversary in July.
The ETF market has grown rapidly this year, driven by increased participation from retail investors and strong interest in artificial intelligence-themed investments, while the Kosdaq has declined amid broad weakness in the index.
According to the Korea Exchange, total net assets of domestic ETFs stood at 519.75 trillion won ($337.94 billion) as of Thursday, exceeding the Kosdaq’s market capitalization of 499.3 trillion won. Although Friday’s total net asset figure has yet to be finalized, industry officials estimate that ETF net assets continued to outpace the Kosdaq through Friday.
It marked the first time that the domestic ETF market's net assets exceeded the Kosdaq's market capitalization since the first ETF was launched in Korea in December 2002. The two markets first reversed positions on Tuesday. A day later, the Kosdaq briefly moved back ahead, but ETFs regained the lead on Thursday.
The growth of the ETF market is attributed to steadily expanding investment demand, particularly among retail investors. ETF net assets, which stood at 297.27 trillion won at the end of 2025, surpassed 300 trillion won in January, 400 trillion won in April and 500 trillion won in May.
Product diversification also supported the expansion. As of Friday, the number of domestically listed ETFs had risen to 1,142, rapidly narrowing the gap with the 1,822 stocks listed on the Kosdaq. Around 100 new ETFs have been listed this year alone, as asset managers competitively launched thematic ETFs favored by retail investors.
By contrast, the Kosdaq market has seen its market capitalization continue to decline. It hit an all-time high of 679.55 trillion won on April 27 but has been on a downward trend since. It first fell below 600 trillion won on May 20 and then dropped below the 500 trillion won mark on Thursday.