Futures trading on South Korea's MSCI index concludes successfully with Eurex's completion of mapping process
Eurex Launches USD-Denominated Futures on MSCI Korea Index
Eurex, a leading global derivatives exchange, has recently launched USD-denominated futures on the MSCI Korea Net Total Return Index. This move provides international institutional investors with efficient dollar-based access to South Korea’s equity market, which constitutes about 10.73% of the MSCI Emerging Markets Index.
The new futures contracts aim to simplify risk management and margin efficiency for investors trading futures across multiple MSCI country indices. By offering a globally recognized MSCI benchmark, these contracts cater to asset managers, banks, and institutions seeking Korean equity exposure.
The launch follows a new clearing link with Korea Exchange (KRX) and complements Eurex’s existing MSCI derivatives offering. With this strategic addition, Eurex is now the only derivatives exchange outside Korea offering futures on a Korean equity index, expanding trading options beyond domestic Korean retail-focused KOSPI derivatives.
The key benefits for international institutional investors include:
- Access to the Korean equity market via a globally recognized MSCI benchmark.
- Margin efficiency and consolidated clearing through Eurex.
- Dollar-denominated contracts, which reduce currency risk and facilitate easier participation for investors outside Korea.
- Availability of country futures on markets representing over 1% weighting in MSCI World or Emerging Markets Indexes, enhancing portfolio diversification opportunities.
The launch of the MSCI Korea futures has been met with positive market reactions. According to Xav Feng, Asia Pacific head of research at LSEG Lipper, the election of Lee Jae-myung, the Democratic Party candidate, has boosted market confidence in South Korea, leading the KOSPI to break through the 2,900-point barrier, reaching a nearly three-year high.
The biggest trade during the first week of the launch was 600 lots. This move is significant as it indicates a strong demand for these futures among international institutional investors.
The Asia-Pacific region accounts for nearly half of the trading volume of the 146 MSCI futures offered by Eurex, with nearly half, 45%, of the total open interest worth €135 bn being linked to Asian underlyings. This suggests that the region plays a crucial role in Eurex’s MSCI derivatives offering.
The addition of the Korean contract means MSCI has almost completed breaking down the benchmark indices into the regional or country levels. This development further enhances the ability of investors to tailor their portfolios to specific regions or countries, offering improved risk-adjusted returns.
With the launch of the MSCI Korea futures, Eurex is strategically positioning itself to cater to the needs of global institutional investors. The exchange's strategy to grow the MSCI suite of contracts is about education and broadening the client group who uses MSCI futures. This move is expected to contribute to the growth and development of the South Korean equity market.
[1] Source: Eurex Press Release, 14 July 2025 [2] Source: Xav Feng, Asia Pacific head of research at LSEG Lipper, interview with Bloomberg, 16 July 2025 [3] Source: Ralf Huesmann, heading product design for MSCI Derivatives at Eurex, interview with Financial Times, 17 July 2025 [4] Source: MSCI, MSCI Emerging Markets Index Fact Sheet, June 2025
- Eurex's launch of USD-denominated futures on the MSCI Korea Index allows for investing in South Korea's equity market, which could potentially improve portfolio diversification opportunities due to the index representing over 1% weighting in MSCI World or Emerging Markets Indexes.
- Technology plays a significant role in Eurex's strategy, as the new MSCI Korea futures contracts aim to simplify risk management and margin efficiency for investors trading futures across multiple MSCI country indices.
- The addition of the MSCI Korea futures, along with Eurex's existing MSCI derivatives offering, aims to cater to asset managers, banks, and institutions seeking Korean equity exposure, and provides liquidity for international institutional investors.
