On April 8 (Tuesday), FTSE Russell released the “FTSE Fixed Income Country Classification March 2025 Review Results Announcement”. FTSE Russell has confirmed that Korea’s full inclusion in the World Government Bond Index (WGBI), as decided in October 2024, will be completed by November 2026.
* FTSE Russell, a subsidiary of the London Stock Exchange Group (LSEG), is one of the largest market index providers in the world, alongside S&P Dow Jones, MSCI, and CRSP.
* World Government Bond Index (WGBI): A leading index that includes government bonds from 26 major countries. With an estimated $2.5.-$3.0 trillion in assets tracking this index, it is the largest global bond index.
The following are excerpts from the press release by FTSE Russell:
“Based on feedback from index stakeholders, FTSE Russell announces details of a refined technical inclusion approach with inclusion phased-in over a shorter eight-month period, in eight equal monthly tranches, commencing with April 2026 index profiles and completed with November 2026 index profiles, in line with previously announced completion date.”
(Original announcement) The index inclusion was set to begin in November 2025, with quarterly increases in the inclusion weight over the course of a year
(Revised announcement) The index inclusion will begin in April 2026, with monthly increases in the inclusion weight until November 2026.
“The refinement of the inclusion approach is reflective of several factors including, feedback that additions of monthly tranches rather than quarterly tranches would offer an additional
element of ease and simplicity for portfolio managers and that index users have indicated that they are able to add the full exposure of South Korea over a condensed time period if sequential monthly tranches are used.”
※ FTSE Russell has previously adjusted the inclusion process flexibly based on investor readiness. In the case of China, when the inclusion in the WGBI was announced in September 2020, the plan was to complete the inclusion over 12 months starting from October 2021. However, in March 2021, the inclusion period was extended to 36 months.
“There continues to be broad support for FTSE Russell’s decision to include South Korea in the FTSE WGBI, with full inclusion on track to be completed by November next year. We commend the commitment of South Korean market authorities in their continuation of initiatives which incorporate the practical feedback of international market participants to align their market with the highest standards for global bond investing. The refinement to the implementation approach in the FTSE WGBI further ensures a frictionless index inclusion, based on demonstrated close collaboration amongst the global investment community.”
In addition, FTSE Russell explained that as of March 2025, Korea’s expected inclusion weight in the WGBI is 2.05%, making it the ninth largest among all included countries.
* WGBI inclusion weights by country (%, including Korea): 1(USA)41.9% 2(China) 10.0% 3(Japan) 9.7% 4(France) 6.4% 5(Italy) 5.9% 6(Germany) 5.0% 7(UK) 4.7%
8(Spain) 3.9% 9(Korea) 2.05%
The government will continue to monitor and improve relevant systems and infrastructure to guarantee that global investors can invest in Korean government bonds without disruptions, while enhancing communication with the market and working towards creating actual investment cases. Furthermore, with an aim to make certain that the inclusion in the WGBI leads not only to the development of the Korean government bond market but also to the structural advancement of the overall capital market, the government will make continued efforts to expand liquidity and improve the structure of the foreign exchange and bond markets.
Please refer to the attached files.
