Improving the Fundamental Quality of the KOSDAQ is Underway
Improving the Fundamental Quality of the KOSDAQ is Underway:
Active vs. Passive ETFs
In 2025, the KOSDAQ market decided to delist 38 companies, a figure 2.5 times higher than the average of the past three years. The average duration for the exit process was also shortened by 21% (105 days) to 384 days. The government’s commitment to improving the fundamental quality of the capital market, centered on the KOSDAQ, is stronger than ever.
The Korea Exchange (KRX) announced plans to transform the KOSDAQ into a "cradle for deep-tech companies" that supports the growth of innovative firms. It also expressed a firm intention to tighten the listing examination process for the "Technology Exception Listing" system, which had previously faced controversy due to the listing of insolvent companies.
There are two types of delisting examinations in the KOSDAQ market: formal grounds and substantive review grounds. Among these, the minimum market capitalization requirement—a formal ground—will be strengthened to 15 billion KRW starting this year. This is more than a three-fold increase compared to last year's 40 billion KRW. Currently, 31 out of 1,737 KOSDAQ-listed stocks have a market capitalization of less than 15 billion KRW.
By 2028, the minimum market capitalization threshold will rise to 30 billion KRW, which would place 201 stocks under delisting review based on current price levels. Substantive review criteria, such as unfaithful disclosures, loss of business continuity, and violations of accounting standards, are also being tightened. This indicates that the structural improvement of the KOSDAQ market is a systemic shift.
Investment methods in the KOSDAQ market using ETFs are divided into Active ETFs, where fund managers exercise discretion, and Passive ETFs, which track representative KOSDAQ indices. There are two primary indices tracked by passive ETFs: "KOSDAQ 150" and "KOSDAQ Global."
The KOSDAQ 150 consists of 150 representative stocks selected based on sector and market capitalization. The KOSDAQ Global is composed of companies selected for their market cap, financial health, and corporate governance. There are currently nine ETFs listed by major asset managers that track the KOSDAQ 150 index. The KOSDAQ Global index currently comprises 52 large-cap stocks, with two listed ETFs: TIGER KOSDAQ Global (461580) and KODEX KOSDAQ Global (461450).
Notably, there are no passive ETFs that track the entire KOSDAQ Composite Index, as it is difficult to manage an ETF that invests in all 1,700+ stocks. Leverage and Inverse ETFs listed for the KOSDAQ market all use the KOSDAQ 150 as their underlying index. Therefore, the performance of leverage or inverse products should not be evaluated based on the fluctuation rate of the KOSDAQ Composite Index itself.
While the top holdings of KOSDAQ passive ETFs are mostly similar, the compositions of active ETFs vary depending on the fund manager's discretion. For instance, Samsung Active Asset Management’s KoAct KOSDAQ Active (0163Y0) and Timefolio Asset Management’s TIME KOSDAQ Active (0162Y0)—which attracted over 1 trillion KRW in funds within just a week of their launch on March 10—maintain portfolios of around 60 to 70 stocks. Although both use the KOSDAQ Composite Index as their benchmark, their investment holdings differ significantly.
The weighted average market cap of the 63 stocks in the TIME ETF is approximately 5.9 trillion KRW, whereas the 77 stocks in the KoAct ETF average 3.3 trillion KRW—a nearly two-fold difference. While portfolio components can change due to active management, it can be analyzed that KoAct invests more in relatively smaller-cap stocks and maintains a higher active ratio.
The choice between active and passive ETFs rests with the investor. However, as the KOSDAQ’s fundamental improvement becomes a reality through the delisting of insolvent firms and stricter listing reviews for tech companies, the market will likely regain trust and attract broader investor interest.
한글 원문 한경닷컴 (회원전용) URL https://www.hankyung.com/article/202603254680i