Futures trading on the MSCI Korea Index are now available on Eurex Exchange.
Eurex, a leading global derivatives exchange, has launched futures on the MSCI Korea Index on July 14, 2025. This move marks a significant step in providing US-dollar denominated exposure to the Korean equity market within the MSCI framework.
The decision to introduce the Korean contract was primarily driven by strong demand from institutional investors such as banks, asset managers, and asset owners. These institutions seek structured, efficient ways to invest in the Korean market, with the futures designed to replace total return swaps, offering better trading and margin efficiencies.
Korea's prominence in the Asian emerging markets is another key factor. About 75% of the MSCI Emerging Market Index is related to Asia, with Korea representing over 10% of the index. This makes Korea a crucial market for investors focused on Asia.
Eurex's strategy to offer futures on nearly all MSCI-classified developed and emerging markets also plays a significant role. With Korea being one of the last major markets added, the launch completes access to almost all such markets through Eurex, attracting global investors looking for comprehensive emerging market exposure.
Timing and liquidity incentives around quarterly roll periods are expected to increase activity and block trading on the futures, particularly by institutional players.
The South Korean stock market has experienced a strong rebound in recent months. As of June 12, 2025, the South Korean stock market, represented by the Korea Composite Stock Price Index (KOSPI), had surged by 21.7%, leading all Asia-Pacific stock markets. This rebound, combined with the narrowing gap between emerging market (EM) and US equity performance, has not diminished the argument that non-US equity markets have had significantly better risk-adjusted returns.
The growth in MSCI Korea Index futures on Eurex is also influenced by favourable shifts in the South Korean stock market. For instance, the candidate from the Democratic Party, Lee Jae-myung, won the South Korean presidential election and has actively promoted tax law reforms, corporate governance, supplementary budgets, and introduced a series of new economic policies. These changes have boosted market confidence, leading the KOSPI to break through the 2,900-point barrier, reaching a nearly three-year high.
Banks such as Goldman Sachs, JPMorgan Chase, Citigroup, and Morgan Stanley have upgraded South Korea since the start of June 2025. As a result, asset managers including Aberdeen Investment, Baird Wealth Management, and Franklin Templeton have gradually increased their holdings in South Korean stocks or upgraded their outlook.
Ralf Huesmann, heading product design for MSCI Derivatives at Eurex, stated that there were trades during the first week, with the biggest one of 600 lots. The MSCI Korea Index futures are not a retail product, and the initial push came from banks who wanted to move out of total return swaps.
Eurex has been working with MSCI on the license for the Korea Index for more than a decade. The addition of the Korean contract means MSCI has almost completed the full puzzle of breaking down the benchmark indices into the regional or country levels.
Sources: Ashmore, Bloomberg
[1] Ashmore Report, End of June 2025 [3] Ralf Huesmann, Product Design for MSCI Derivatives at Eurex [1] Xav Feng, Asia Pacific head of research at LSEG Lipper [1] Source: Ashmore for the last two facts.
- Institutional investors, such as banks, asset managers, and asset owners, have shown a strong interest in investing in the Korean market, leading Eurex to introduce futures on the MSCI Korea Index.
- The MSCI Korea Index futures offered on Eurex are designed to replace total return swaps, providing better trading and margin efficiencies for these investors.
- The growth in MSCI Korea Index futures trading on Eurex can be attributed to the strong rebound of the South Korean stock market, favorable shifts in the political landscape, and the completion of Eurex's strategy to offer futures on nearly all MSCI-classified developed and emerging markets.
- Banks like Goldman Sachs, JPMorgan Chase, Citigroup, and Morgan Stanley, and asset managers including Aberdeen Investment, Baird Wealth Management, and Franklin Templeton have been increasing their holdings in South Korean stocks, influenced by the rebound in the South Korean stock market and the addition of the Korean contract for MSCI derivatives on Eurex.
