Korea Exchange said on Tuesday it agreed with Hang Seng Indexes Company (HSIL) to develop joint indexes and announced a total of 4 indexes, including 1 flagship index and 3 theme indexes such as tech and bio.

The joint indexes combine benchmark indexes and semiconductor and bio theme indexes from South Korea and Hong Kong. They are designed to allow global investors to invest simultaneously in listed companies in both markets.

The indexes were developed as an index-of-index structure combining 65 percent from Hong Kong indexes and 35 percent from South Korean indexes.

The structure is intended to meet ETF Connect requirements of at least 60 percent in eligible Hong Kong stocks. Monthly rebalancing keeps the 65 to 35 weighting. ETF Connect is a scheme that allows mainland Chinese investors to trade Hong Kong-listed ETFs.

The background to the joint index development includes steep rises in both stock markets and increased demand for overseas investment through Hong Kong. On an annual basis in 2025, the KOSPI rose about 75.6 percent and the Hang Seng Composite Index rose about 27.8 percent, drawing interest from global investors.

The expansion of the ETF Connect scheme also played an important role. ETF Connect, introduced in July 2022, expanded its trading universe from July 2024 to include overseas stock mixed ETFs. The daily average trading value of ETF Connect products was 1.4 trillion won, up 66 percent from a year earlier.

A Korea Exchange official said that if ETFs based on the joint indexes are listed in Hong Kong, accessibility to South Korea's stock market for global investors, including mainland Chinese funds, is expected to increase significantly. The official added that the exchange plans to actively support the development and listing of joint index-based ETFs with HSIL and local asset managers.