Seoul: South Korea plans to encourage more active investment by its public funds, which collectively manage an estimated 1,400 trillion won (US$981.5 billion), in the country's secondary KOSDAQ stock market, the budget ministry said Thursday. Under a plan finalized by acting Budget Minister Lim Ki-geun, the government aims to expand fund investment in the technology-heavy KOSDAQ market, which has long been viewed as an underperformer compared with the benchmark Korea Composite Stock Price Index (KOSPI).
According to Yonhap News Agency, the Ministry of Planning and Budget stated, "Including and expanding KOSDAQ stocks in domestic equity investment portfolios will help diversify investments and contribute to building a foundation for innovative growth." A total of 67 public funds managed a combined 1,222 trillion won as of 2024, according to the ministry. The figure is expected to have reached 1,400 trillion won as of last year.
As of 2024, public fund investment in the KOSDAQ totaled 5.8 trillion won, accounting for just 3.7 percent of their total domestic equity investments, according to the ministry. This marks the first time the government has announced a basic framework for managing public funds, built around four core principles: stability, liquidity, profitability, and public interest.
Earlier this week, the KOSDAQ landed above 1,000 for the first time in more than four years.