MSCI Keeps South Korea in Emerging Markets, Citing Structural Gaps

The index provider's decision maintains the status quo for global fund flows, despite the KOSPI's strong recent performance.

By Handelsavisen Newsroom · Automated 2026-06-25 13:09 UTC · 1 min read

MSCI has retained South Korea's classification as an emerging market, rejecting calls to upgrade the nation to developed-market status.

The decision, announced Thursday, underscores that strong equity performance alone is insufficient to alter the index provider's structural assessment of the country's market infrastructure and regulatory environment.

Henry Fernandez, CEO of MSCI, identified specific shortcomings that continue to separate South Korea from developed-market peers.

While the KOSPI has delivered robust returns, making it one of the top-performing equity markets globally, Fernandez indicated that the market still falls short on key criteria related to market depth, transparency, and investor protections required for a developed designation.

The classification carries significant weight for global asset allocators.

Many institutional investors and passive funds are mandated to adhere to MSCI's categorizations, meaning an upgrade would trigger automatic inflows into Korean equities.