The Korea Fund, Inc. Announces New Share Repurchase Program, Current Capital Gain For Distribution And Change In Benchmark

The Board of Directors of The Korea Fund, Inc. (the “Fund”) (NYSE: KF), today announced a new share repurchase program under which the Fund will repurchase, commencing November 1, 2011, its common shares in the open market on any day that the Fund’s shares are trading at a discount of 8% or more from net asset value the prior day and there is a daily average discount of 8% or more from net asset value over the 5-day period ending the prior day. On each day that shares are repurchased, the Fund will repurchase its shares to the maximum extent permitted by law unless the Fund’s investment manager determines that such a repurchase would be detrimental to the Fund and its shareholders. Under the program, the Fund is authorized to repurchase in each twelve month period ended October 31 up to 10% of its common shares outstanding as of October 31 the prior year. For example, for the year November 1, 2011 to October 31, 2012, the Fund may repurchase up to 10% of its common shares outstanding as of October 31, 2011.

The new repurchase program replaces the Fund’s existing share repurchase program announced in March 2010, under which the Fund was authorized to repurchase from time to time in the open market up to 5% of its common shares outstanding as of February 22, 2010. As of September 30, 2011, the Fund has repurchased 458,964 shares, representing 4.39% of the shares outstanding at the beginning of the program.

The new repurchase program is intended to enhance shareholder value, as repurchases made at a discount have the effect of increasing the net asset value per share of the Fund’s remaining shares.

There is no assurance that the market price of the Fund’s shares, either absolutely or relative to net asset value, will increase as a result of any share repurchases. These repurchases may be suspended at any time or from time to time without prior notice. The Fund’s repurchase activity will be disclosed in its shareholder reports for the relevant fiscal periods.

Update on Capital Gain Distribution

At September 30, 2011, the Fund had approximately $60 million of capital gains available for distribution, subject to any additional realized gains or losses incurred through October 31, 2011.

Change in Benchmark

The Board of Directors also is announcing its intention to change the Fund’s primary benchmark from the Korea Composite Stock Price Index (“KOSPI”) to the Morgan Stanley Capital International (“MSCI”) Korea Index (Total Return) on January 1, 2012. The change is subject to finalizing licensing arrangements with MSCI.

The Korea Fund, Inc. is a non-diversified, closed-end investment company that seeks long-term capital appreciation through investments in securities, primarily in equity securities, of Korean companies. Its shares are listed on the New York Stock Exchange under the symbol "KF."

RCM Capital Management LLC and RCM Asia Pacific Limited are the Fund's investment manager and sub-adviser, respectively. Investment in closed-end funds involves risks. Additional risks are associated with international investing, such as currency fluctuation, government regulations, economic changes and differences in liquidity, which may increase the volatility of your investment. Foreign security markets generally exhibit greater price volatility and are less liquid than the U.S. market. Additionally, this Fund focuses its investments in certain geographical regions, thereby increasing its vulnerability to developments in that region. All of these factors potentially subject the Fund's shares to greater price volatility. The net asset value of the Fund will fluctuate with the value of the underlying securities. Closed-end funds trade on their market value, not net asset value, and closed-end funds often trade at a discount to their net asset value.

The Fund's daily New York Stock Exchange closing price and net asset value per share, as well as other information, including updated portfolio statistics and performance, are available at www.thekoreafund.com or by calling the Fund's shareholder servicing agent at (800) 254-5197.

Statements made in this release that look forward in time involve risks and uncertainties and are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from a decline in the securities markets or a decline in the Fund's performance, a general downturn in the economy, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement its operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations.

This announcement is not an offer to purchase or the solicitation of an offer to sell shares of the Fund or a prospectus, circular or representation intended for use in the purchase or sale of Fund shares.

Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.

Copyright Business Wire 2010

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