Korea Value Up Index: Outperformance Relative to KOSPI200 & KOSDAQ150 Likely to Attract Greater Capital Inflow

• Korea Value Up index is up 8.2% from 30 September 2024 to 28 May 2025, outperforming KOSPI 200 (up 3.4%) and KOSDAQ 150 (down 7.9%) in the same period.

• More capital is likely to flow into the Korea Value Up index going forward. The government's efforts to continue to push the Korea Value Up index is also positive.

• The median market cap of the 27 new additions is 2,310 billion won versus 835 billion won for the 32 deletions. KRX is emphasizing on companies with higher market cap.

Source: Korea Exchange

Overall Highlights of the Korea Value Up Index

The following are the major highlights of the Korea Value Up Index:

• Increasing importance - Korea Value Up index for now is not as important as KOSPI 200 or KOSDAQ 150 indices. However, with increasing government push to emphasize Korea Value Up Index, it is likely that more ETFs and other passive funds tracking Korea Value Up index will increase.

• Market cap - The median market cap of the 27 new additions is 2,310 billion won versus 835 billion won for the 32 deletions. Clearly, Korea Exchange is emphasizing on companies with higher market cap, albeit with greater shareholder returns and value components.

• Sectors - In this rebalance, there has been increase in industrial sector companies relative to information technology and health care sectors.

• Relative Outperformance - Korea Value Up index is up 8.2% from 30 September 2024 (launch date) to 28 May 2025, outperforming KOSPI 200 (up 3.4%) and KOSDAQ 150 (down 7.9%) in the same period. So, despite all the controversies regarding the Korea Value Up index, it has performed better than two widely followed equity indices in Korea. Therefore, more capital is likely to flow into the Korea Value Up index going forward. The government's efforts to continue to push the Korea Value Up index (regardless of who wins the election on 3 June) is also likely to continue to positively impact the growth of the Korea Value Up index going forward.

New Inclusions in the Korea Value Up Index

There were 27 new inclusions in the Korea Value Up index. These 27 companies' share prices were up on average 1.7% (as of morning of 28 May) versus closing price on 27 May. The share prices of four companies in particular are up more than 3% (HD Hyundai, Solus Advanced Materials, PSK Holdings, and Hanwha System).