How Korea’s Stock Indices Actually Get Built

Key Takeaways

• Three Korean indices do most of the work, and they are not interchangeable. KOSPI 200 represents Korea’s main board, KOSDAQ 150 represents its growth-and-tech secondary board, and KRX 300 spans both markets in a single 300-name benchmark. Each has its own published, dated Korea Exchange (KRX) methodology document, and this guide works from those documents rather than secondary summaries.
• “200 stocks” sounds narrow. It isn’t. After KRX’s June 2026 regular review, KOSPI 200’s constituents represented 94.9% of the entire KOSPI market’s total capitalization. Two hundred names, by KRX’s own count, are most of the market by value—the roughly 650 other KOSPI-listed companies split the remaining twentieth.
• A stock’s full market capitalization is not what earns it index weight. All three indices weight by free-float-adjusted market cap: shares held by controlling shareholders and other non-tradable stakes are excluded from the calculation entirely. KOSPI 200 phased this in in two steps in 2007; it has been full-float ever since.
• KOSPI 200 tried a 30% single-stock weight cap. It lasted ten months. Introduced June 14, 2019, repealed April 27, 2020. What replaced it wasn’t nothing. KRX still publishes separate “Capped 20%,” “Capped 25%,” and “Capped 30%” versions of KOSPI 200 as their own distinct products for funds that need one. KOSDAQ 150’s own methodology states outright that it applies no cap at all.
• All three rebalance on the same twice-yearly calendar, tied to KOSPI 200 futures expiry. Effective the trading day after the June and December contract settlement, decided in May and November. When a stock is added or dropped, funds built to replicate the index are on the hook to trade it at the close on the effective date—which is why inclusion and exclusion move a stock’s price. The mechanism is explained in general terms below, without a case study.
• This opens a series on who moves Korean stocks and why. A companion piece on foreign ownership ceilings and Korea’s foreign inclusion factor is part of this hub’s opening cluster. Two cluster pieces cover how MSCI and FTSE review Korean stocks on their own calendars and rebalance-day flow mechanics at the closing auction. A further piece will cover the National Pension Service’s own mandate-driven rebalancing in more depth. MSCI’s classification of Korea and the WGBI bond-index phase-in have their own pieces and are only named here.

Contents

1. Three benchmarks, three jobs
2. Getting in the door: eligibility screens
3. Free float: why the sticker price of a company isn’t its index weight
4. Caps: the one that got repealed and the ones still sold separately
5. The rebalance calendar and a live 2026 example
6. What happens on the effective day
7. Misreadings to avoid
8. Frequently asked questions

Few won figures appear below. Where one does, the dollar figure uses $1 = 1,386.61 KRW, the XE.com mid-market rate on September 20, 2026.

1. Three benchmarks, three jobs

People use the three names interchangeably, and they shouldn’t. Each does a different job.

KOSPI 200, developed in June 1994, represents the KOSPI market—Korea’s main board, home to the country’s largest and most established listed companies. It’s the underlying index for Korea’s benchmark equity futures and options contracts, and the index most Korea-focused ETFs track. Its base date is January 3, 1990, set at 100. (Whether a foreign investor can use that futures and options access is a separate question, covered in our product-menu piece.)

KOSDAQ 150, developed in July 2015, does the same job for the KOSDAQ market—Korea’s secondary board. It’s weighted toward technology, biotech, and growth names in a way the main board isn’t. Its base date is January 4, 2010, set at 1,000.

KRX 300, developed in February 2018, is the odd one out: it doesn’t represent one market. It draws its eligible universe from KRX’s own broader benchmark index—an internal universe KRX calls the “KRX BMI”—spanning both KOSPI and KOSDAQ. From that combined pool, it selects 300 names to build a single cross-market benchmark. Its base date is also January 4, 2010, set at 1,000.

All three share one design principle: none of them is simply “the biggest N companies.” Each one classifies its eligible universe into industry sectors first, then fills sector by sector. That keeps the index from becoming a semiconductor-and-battery fund just because those sectors have the largest companies at a given moment. The next section covers how that sector-by-sector filling works and where the three indices differ.

One index is left out on purpose. MSCI’s separate classification of Korean equities—its emerging-versus-developed-market debate—is not a KRX index at all. It’s a different index provider’s judgment call, with its own methodology. See Why MSCI Still Calls Korea an Emerging Market for that story. MSCI comes up once more, in §6, as one example of the forced-flow mechanism.

2. Getting in the door: eligibility screens

Before KRX ranks anything by size, it disqualifies a chunk of the field outright. The disqualifying categories differ slightly by index. But the shape is the same: stocks that aren’t real, free-floating, liquid, ordinary equity don’t get considered, no matter how large they are.

KOSPI 200 excludes administrative-issue and delisting-track stocks, collective investment vehicles, and foreign shares and depositary receipts. It also excludes structurally different vehicles: REITs, ship investment companies, social infrastructure investment and finance companies, and special-purpose acquisition companies (SPACs). KOSDAQ 150 excludes the same kind of structural outliers (REITs, ship investment companies, social infrastructure vehicles, and SPACs), plus KOSDAQ’s own “investment caution alert” designation. KRX 300 takes a narrower legal test instead. Capital impairment in the latest completed fiscal year, a formal balance-sheet measure of a company eroding its own paid-in capital, is disqualifying.

Two screens apply to all three, with different thresholds, so they need naming precisely:

• Minimum free-float ratio. KOSPI 200 and KOSDAQ 150 both set the floor at 10% of shares outstanding. KRX 300 sets it higher, at 20%.
• New-listing seasoning period. All three require six months of trading history before a stock is eligible for the regular review, with an exception carved out for spin-off successor companies and a separate fast-track rule for very large new listings (covered in §5).

From there, each index classifies its surviving universe into GICS-based industry sectors. It then screens by two measures over a trailing six-month window: average daily market capitalization (size) and average daily trading value (liquidity). This is where the three diverge in specifics.

That classification is itself changing. On September 22, 2026, KRX announced KRICS (KRX Industry Classification Standard), its own nine-sector scheme built to replace GICS in its index methodology. KRX enacted the classification methodology on September 23, 2026. It will publish company-level classification data starting October 26, 2026. It is targeting a November 2026 revision of the index methodology to apply KRICS to KOSPI 200 and KOSDAQ 150 first. The sector thresholds below are the rules as published; what counts as a “sector” underneath them is scheduled to change.

KOSPI 200 selects, sector by sector, down to a cumulative 85% of that sector’s total market cap. KRX has raised that threshold twice—from an original 70% to 80% in 2017, then to 85% in December 2019. It then applies a liquidity cut, removing anything outside the top 85% of that sector’s eligible names by trading value.

KOSDAQ 150 uses a lower cumulative bar, 60% of sector market cap, reflecting a design meant to spread selection across a broader, choppier universe, with a liquidity cut at the top 80% of the sector.

KRX 300 runs a dual test instead of a single cumulative threshold. A stock qualifies if it’s needed to reach 80% of the cumulative sector market cap or if it separately ranks in the top 30% of the sector by count. The same top-80%-by-liquidity filter sits on top of either path.

A second-round “buffer” rule then works to stop the index from churning every six months over marginal size changes. An existing constituent that’s still liquid and hasn’t fallen too far down the size ranking gets to stay, even if a fresh, from-scratch selection wouldn’t have picked it. KOSPI 200 sets that buffer at 110% of a sector’s existing constituent count. It requires a new entrant to rank within 90% of that count to get in. KOSDAQ 150 is more generous to incumbents, at 120%, with new entrants needing to rank within 80% (unless a sector has fewer than three existing members). KRX 300’s buffer works differently in kind: it’s measured against the index’s total 300-constituent count rather than sector by sector.

Each index also carves out a large-cap fast lane: a stock that misses the ordinary criteria but ranks near the very top of its own market by size gets in anyway, bumping out whichever existing constituent has become the smallest by market cap. KOSPI 200 sets that bar at the top 50 companies by market cap within the KOSPI market. KOSDAQ 150 sets it at the top 50 within KOSDAQ. KRX 300, drawing from both markets, sets it at the top 100 across the combined universe. KOSDAQ 150 alone runs the opposite check too. This is a small-cap override that can exclude an otherwise-qualifying stock if it falls outside the top 300 KOSDAQ common stocks by market cap.

Finally, KOSPI 200 and KOSDAQ 150 both keep a ranked reserve list. That’s up to ten names per sector for KOSPI 200, up to five for KOSDAQ 150. It’s used to fill a vacancy immediately if a constituent is removed between regular reviews for reasons like delisting or an administrative-issue designation. KRX 300 keeps none. Its own methodology document states this plainly: it does not maintain a reserve list at all.

KRX signaled on September 17, 2026, that it intends to abolish the reserve-list system for both KOSPI 200 and KOSDAQ 150 as part of the same methodology overhaul, letting an index run at 199 or 149 names until the next regular review rather than filling the gap immediately. As of September 23, 2026, that change had been signaled but not finalized.

None of this is arbitrary trivia. It’s the reason a stock can be one screen away from KOSPI 200 inclusion in June and comfortably in by December without anything about the company itself having changed. The bar it’s being measured against moved. Or a buffer rule that would have protected it, had it already been a constituent, simply didn’t apply because it wasn’t one yet.

3. Free float: why the sticker price of a company isn’t its index weight

A company’s headline market capitalization is a poor guide to its pull on these indices. None of the three indices weight constituents by their full market cap. All three use free-float-adjusted market capitalization instead. Shares controlled by founders, other controlling shareholders, treasury holdings, and similar non-tradable stakes are stripped out of the calculation before a weight is assigned.

KOSPI 200 didn’t start out this way. It phased float-weighting in over two steps in 2007. A “half float” transition on June 15 that year excluded 50% of identified non-float shares from the index calculation. A “Full Float” transition followed on December 14, 2007, excluding the rest. It has calculated on a fully float-adjusted basis ever since.

What this means in practice: two companies with identical total market capitalization can carry meaningfully different index weights if their free-float ratios differ. A company where a founding family retains a large controlling stake contributes less of its total market value to the index than a company of the same total size with a more widely distributed shareholder base. Controlling-family concentration shapes a lot of Korean market structure, and our Korea Discount hub covers that governance story.

4. Caps: the one that got repealed and the ones still sold separately

Secondary sources often get this backwards: the flagship index carries no cap on how much weight any single stock can hold.

It isn’t that KRX never tried. On June 14, 2019, KRX introduced a 30% single-stock weight cap on KOSPI 200—and, in the same move, on KOSPI 100, KOSPI 50, and KRX 300—a response, in substance, to concerns about how concentrated those indices had become in their very largest names. That cap lasted ten months. KRX repealed it on April 27, 2020. KOSPI 200’s own methodology document, current as of its December 2020 publication, describes the base index as uncapped.

What replaced the cap on the flagship index was a menu. KRX still calculates and publishes three separate, explicitly capped variants. “KOSPI 200 Capped 20%,” “Capped 25%,” and “Capped 30%,” each maintained as its own named product, alongside further total-return and USD-denominated versions of each. A fund manager who needs single-name exposure limited for regulatory or mandate reasons, a common requirement for diversified funds, tracks one of those named variants instead of the base benchmark. The base KOSPI 200 that everyone quotes as “the market” stays uncapped; the capping happens one product layer up, for whoever specifically needs it.

KOSDAQ 150 never went through this back-and-forth at all. Its methodology document states outright, in a dedicated line, that it applies no cap. KRX 300 did go through it. It carried the same 30% cap and lost it in the same April 2020 repeal. But its own methodology document, published the month after that repeal, simply has no cap section. And no “KRX 300 Capped” product family appears in KRX’s published index list. Treated here as uncapped, on documentary footing, that is an absence rather than KOSDAQ 150’s explicit statement.

The practical upshot for anyone using these indices as a proxy for “the market”: KOSPI 200’s exposure to its largest constituent, whichever company that happens to be at a given point, is not limited by the flagship index’s own construction rules. It’s a function of that company’s actual float-adjusted market value relative to the rest of the index—full stop—unless you’ve specifically chosen one of the capped variants instead.

5. The rebalance calendar and a live 2026 example

All three indices share the same regular-review rhythm. Reviews happen twice a year. The constituent changes take effect on the trading day after the final trading day of the June and December KOSPI 200 futures contracts. That’s the second Thursday of each of those months, which puts the effective date in mid-June and mid-December each year. KRX’s Index Steering Committee finalizes the decisions and confirms them “in May and November,” publishing results through KRX’s own index website.

This twice-yearly cadence dates only to December 11, 2019. Before that, KOSPI 200 ran on a once-a-year cycle and was reviewed only in June. That’s when KRX shortened the cycle to the June/December schedule that now governs all three indices.

A concrete, dated example: KRX’s Index Steering Committee met on May 21, 2026, and announced its decision the next day. The regular review replaced 4 stocks in KOSPI 200 and 16 in KOSDAQ 150 and added 45 while removing 42 in KRX 300. KOSPI 200 added HD Construction Equipment, DB HiTek, Dalba Global, and OCI, while removing GS E&C, Sebang Global Battery, Grand Korea Leisure, and GC Holdings. The changes were reflected in the index calculation after the market close on June 11, 2026—the June futures and options expiry. They took effect the next trading day, June 12, 2026. KRX’s own announcement, reported alongside the change, put a number on how much of the market 200 names cover. After that review, KOSPI 200’s constituents represented 94.9% of the entire KOSPI market’s total capitalization.

Read that 94.9% figure carefully, because it’s the piece’s central point about scale. “200 stocks” sounds like a narrow slice. By value, it’s nearly the whole board. The roughly 650 other KOSPI-listed companies split a bit more than a twentieth of total market capitalization among themselves.

Between these twice-yearly regular reviews, ad hoc changes still happen. A stock gets delisted, or hits an administrative-issue designation, or (KOSDAQ 150 specifically) an investment-caution-alert flag. Removal happens a fixed number of trading days after the triggering event. For KOSPI 200 and KOSDAQ 150, the two indices that maintain a reserve list under the rules described above, the top-ranked reserve name in the same sector steps in immediately—though KRX has signaled it intends to abolish that reserve-list mechanism for both indices (see §2). KRX 300, with no reserve list, doesn’t describe an equivalent same-day swap in its own methodology.

6. What happens on the effective day

This is the mechanism that connects everything above to why any of it matters to a price.

A large population of funds, Korean-listed ETFs, index mutual funds, and international vehicles alike, are built specifically to replicate KOSPI 200, KOSDAQ 150, or KRX 300 as closely as possible. When KRX adds a stock effective a given trading day, every fund built to track that index is contractually and operationally on the hook to own it starting that day. When KRX removes one, every one of those funds has to sell it. In practice, a large share of that buying and selling happens at or near the closing auction on the last trading day before the change takes effect. That’s the exact price point the index itself will use to recalculate its own weights going forward, and a fund that wants to minimize tracking error against the index has every reason to transact at that same moment rather than drift away from it.

The mechanism is general. It holds for almost any float-weighted benchmark with real assets tracking it. The size of the money involved can be estimated, even if no single stock’s move can. Korean financial media put Korea’s domestic equity ETF market at roughly 200 trillion won at the end of April 2026. Of that, about 160 trillion won (about $115 billion) sat in market-representative and thematic funds. KOSPI 200 trackers are the largest component of that block, and it’s the scale of money that has to move every time KRX’s Index Steering Committee changes the constituent list. That is why an inclusion or exclusion decision is a mechanical trading event for the stock.

There’s no “stock X gained Y% after being added” case study here on purpose. The closest figures I found traced back to a single Korean-language analysis repeated by a couple of secondary sources, which isn’t enough to put in front of readers making decisions. Our piece on rebalance day and the closing auction covers the flow mechanics in detail. What holds up is the mechanism itself: inclusion and exclusion force real, scheduled, close-of-day trades from real money, whether the fund following the rule is a small domestic ETF or a large global index mandate.

The same mechanism shows up in three other places we cover in depth. The National Pension Service’s own portfolio-rebalancing rules create a similar forced-flow dynamic, on a much larger scale and with a different trigger. It’s a pension-fund story rather than an index-construction one, and our piece on the NPS’s market power tells it properly. FTSE Russell’s phased inclusion of Korean government bonds into its World Government Bond Index (WGBI) is the same “index inclusion forces flow” mechanic in the bond market. See our piece on that phase-in. MSCI’s own emerging-versus-developed-market classification of Korea (a decision made entirely outside KRX, by a different index provider with its own methodology) carries exactly this kind of flow consequence, at a scale larger than any single KOSPI 200 rebalance. Our MSCI piece covers that debate in full. A companion piece in this series covers foreign ownership ceilings and Korea’s foreign inclusion factor, a related but distinct mechanism governing how much of a Korean company foreign investors can hold in the first place, rather than which index a stock sits in.

7. Misreadings to avoid

“KOSPI 200,” “KOSDAQ 150,” and “KRX 300” are not three sizes of one list. They aren’t nested, and they measure different things. KOSPI 200 and KOSDAQ 150 each represent one market; KRX 300 spans both by drawing from a broader combined universe. A stock’s presence or absence in one says nothing mechanical about its status in another. Each has its own eligibility screens, its own thresholds, and (per §2) its own reserve-list policy.

KOSPI 200 has no single-name weight cap. It had one, for about ten months in 2019–2020, and plenty of older material describes that cap as if it’s still in force. It was repealed April 27, 2020. If you specifically need capped exposure, the capped variant indices exist as separate, named products. But the benchmark most people mean when they say “KOSPI 200” is not one of them.

The eligibility thresholds differ by index. The free-float floor is 10% for KOSPI 200 and KOSDAQ 150 but 20% for KRX 300. The sector-level market-cap cutoff for initial selection is 85% for KOSPI 200, 60% for KOSDAQ 150, and a dual 80%-or-top-30%-by-count test for KRX 300. Quoting one index’s rule for another is a checkable error.

Why treat index inclusion as a trading event? Because it is one. A stock’s addition to or removal from one of these indices isn’t primarily a vote of confidence or a demotion. It’s a trigger that forces a large, quantifiable population of tracking funds to transact, generally at or near the close on the effective date. The direction of that flow is entirely mechanical and independent of the company’s own fundamentals on that particular day.

8. Frequently asked questions

What’s the difference between KOSPI 200, KOSDAQ 150, and KRX 300? KOSPI 200 represents Korea’s main board. KOSDAQ 150 represents the secondary, growth-and-tech-weighted board. KRX 300 spans both markets in one 300-name benchmark drawn from a broader combined universe. Each has its own separately published KRX methodology, eligibility thresholds, and (for KOSPI 200 and KOSDAQ 150, though KRX has signaled plans to abolish it—see §2) reserve-list policy.

Is any of this about to change? Yes, in two ways KRX had announced but not yet applied by September 23, 2026. First, KRX enacted a new nine-sector classification standard (KRICS) on September 23, 2026, to replace the GICS-based sectors described above. Company-level data starts October 26, 2026. KRX is targeting a November 2026 index-methodology revision to apply it to KOSPI 200 and KOSDAQ 150 first. That would change what “sector” means for every threshold in §2. Second, KRX signaled on September 17, 2026, that it intends to abolish the reserve-list system for KOSPI 200 and KOSDAQ 150. Neither change is finalized; both would leave the free-float, seasoning, and buffer rules described above unaffected.

Does KOSPI 200 cap how much weight one stock can carry? No—not as of September 2026. KRX introduced a 30% cap on June 14, 2019, and repealed it on April 27, 2020. Separately maintained “Capped 20%,” “Capped 25%,” and “Capped 30%” versions of KOSPI 200 exist as their own distinct products for funds that specifically need single-name limits.

Why does free float matter for index weight? Because all three indices exclude shares held by controlling shareholders and other non-tradable stakes from the market-capitalization figure used to calculate index weight. Two companies of identical total size can carry different weights if their free-float ratios differ. KOSPI 200 moved to full float-weighting in two steps in 2007.

How often do these indices rebalance, and when does a change take effect? Twice a year for all three. Decisions are finalized in May and November. They take effect the trading day after the last trading day of the June and December KOSPI 200 futures settlement months. KRX’s June 2026 regular review, announced May 22, 2026, took effect June 12, 2026, replacing 4 KOSPI 200 constituents and 16 in KOSDAQ 150 and adding 45 while removing 42 in KRX 300.

Why does getting added to or dropped from one of these indices move a stock’s price? Because a large population of funds is contractually built to replicate each index as closely as possible. When a stock is added or removed, those funds have to buy or sell it, typically at or near the closing auction the day before the change takes effect, because that’s the price the index uses to recalculate. I describe the mechanism rather than quote an unverified price-impact figure for any specific case.

Does this cover every Korean stock index? No. It covers the three KRX benchmarks that most Korea-tracking funds and listed derivatives are built on. KRX calculated 1,093 indices as of the end of June 2026, and several others are broad-market equity benchmarks in their own right—the KOSPI and KOSDAQ composites that headlines quote, KRX 100, KOSPI 100 and KOSPI 50, KTOP 30, and the Korea Value-up Index launched in 2024. Those, along with sector and thematic indices, leveraged and inverse variants, and index providers outside KRX (MSCI, FTSE Russell), are named where relevant and otherwise out of scope.

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Last updated: September 23, 2026

Disclaimer: This article is for general informational purposes only and does not constitute investment, legal, or tax advice. Index construction rules, thresholds, and product lineups described here are current as of the publication date and are subject to revision by the Korea Exchange without notice. One statistic found in secondary sources, a claimed average stock-price gain between the KOSPI 200 inclusion announcement and effective date, could not be verified to our standard and is not used above. Confirm current index rules directly with the Korea Exchange or a licensed broker before making any investment decision. Seoul Market Brief does not recommend any specific security, fund, or transaction.