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Korean gov't bonds to be included in WGBI from April of next year

Published: 08 Oct. 2025, 17:21 Updated: 08 Oct. 2025, 17:24

The London Stock Exchange (LSEG) in London is seen on April 25. [EPA/YONHAP]

Korean government bonds will be included in the World Government Bond Index (WGBI) starting next April — a piece of news expected to boost the value of domestic bonds and attract significant inflows of foreign capital.

FTSE Russell, a global index provider based in Britain, announced on Tuesday that it plans to begin including Korean government bonds in the WGBI from April 2026.

The WGBI is one of the world’s three major bond indexes tracked by global institutional investors, alongside the Bloomberg Barclays Global Aggregate Index (BBGA) and the JP Morgan Government Bond Index-Emerging Markets (GBI-EM).

FTSE Russell had announced initially in its semiannual review in October last year that Korea would be added to the WGBI starting in November 2025. However, in its April review this year, the start date was pushed back to April 2026, while the completion date for full inclusion remained November 2026.

Inclusion in such indexes typically takes about a year and is carried out in phases. FTSE Russell clarified that the timeline remains unchanged, reaffirming that Korea will begin the inclusion process as planned next April, with the process to be completed in eight stages by November 2026.

“Through ongoing, collaborative dialogue with the investment community, exchanges, regulators, and other key stakeholders, we maintain best practice, ensuring our indexes accurately represent real investment opportunities and remain aligned with the needs of the market,” FTSE Russell said in a statement.

A digital screen at the London Stock Exchange (LSEG) in London is seen on April 25. [EPA/YONHAP]

Inclusion in the WGBI is considered a mark of recognition that Korean government bonds are stable and credible in the global bond market. It is expected to lead to increased foreign capital inflows and reduce borrowing costs for the government.

The announcement comes at a favorable time, as the Korean government plans large-scale bond issuances as part of its expansionary fiscal policy. The Ministry of Economy and Finance estimates that WGBI inclusion could attract at least $56 billion in additional foreign investment into the Korean bond market.

As of October, Korea’s projected weighting in the WGBI is 2.08 percent, the ninth-largest among all included countries. The United States holds the largest share at 40.9 percent, followed by China at 10.1 percent, Japan at 9.2 percent, France at 6.5 percent, Italy at 6.0 percent, Germany at 5.2 percent, Britain at 5.1 percent and Spain at 4.0 percent.

“This announcement enhances predictability for the market and strengthens trust and stability in the Korean government bond market,” said a Finance Ministry official. “We will continue to advance our foreign exchange and capital markets to ensure foreign investors can access Korea’s capital market without barriers.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JANG WON-SEOK [[email protected]]