NEW YORK, May 13, 2021 /PRNewswire/ — KraneShares, a global asset management firm known for its China-focused exchange-traded funds (ETFs) and innovative China investment strategies, announced the launch of the Krane China Innovation Strategy. The ETF model portfolio seeks to provide investors exposure to themes that capture China’s innovation in science and technology. By combining China’s growth industries, such as the internet, healthcare, clean technology, and 5G, and including exposure to the newly launched Shanghai Stock Exchange Science and Technology Innovation Board (STAR Market), the Krane China Innovation Strategy can provide investors with an enhanced and future-focused China allocation.
The Krane China Innovation Strategy offers an initial weight exposure to the following KraneShares ETFs:
- KraneShares CSI China Internet ETF (KWEB): 30%
- KraneShares MSCI All China Health Care Index ETF (KURE): 25%
- KraneShares MSCI China Clean Technology Index ETF (KGRN): 20%
- KraneShares CICC China 5G & Semiconductor ETF (KFVG): 15%
- KraneShares SSE STAR Market 50 Index ETF (KSTR): 10%
China innovation opportunity overview
China has the world’s largest internet population1 and E-Commerce market2. It is expanding 5G infrastructure throughout the country to ensure that hundreds of millions of additional people have high speed and reliable internet.
Simultaneously, China is upgrading its health care sector as it pushes to expand coverage and lead the world in biotechnology and advanced patent pharmaceuticals. All of this comes as China is becoming increasingly conscious of the environment. According to the International Renewable Energy Agency (IRENA), close to $110 trillion is expected to be invested in clean technology industries globally over the next 30 years3. As the world’s largest emitter of carbon dioxide4, China is focused on reducing emissions by expanding its clean technology capacity, including through electrification and renewables.
To facilitate investment and access to capital for high tech industries, China launched the STAR Market, which serves as a springboard for private science and technology companies to go public.
“With so much growth and innovation coming from various sectors in China, we are excited to launch the Krane China Innovation Strategy to help investors achieve an efficient portfolio approach to China innovation,” said Jonathan Shelon, Chief Operating Officer of KraneShares.
Expanding platform availability
The launch of the China Innovation Strategy coincides with the expansion of Krane’s model portfolio availability on the SMArtX, Smartleaf, and Orion Communities Platform.
Additional KraneShares ETFs model portfolios include:
Krane Dynamic Emerging Markets Strategy provides potential outperformance opportunities by pairing a distinct allocation to China’s equity market within a wider Emerging Markets strategy. The portfolio dynamically adjusts weights to China and EM ex-China based on a proprietary, time-tested, and systematic methodology. The model can act as a comprehensive, stand-alone emerging market portfolio or as a complement to an existing strategy.
Krane Dynamic China Growth Strategy provides investors core exposure to the brightest high-growth areas within China’s economy. Specifically, the model includes China’s rapidly growing internet and healthcare sectors, as well as the Mainland China A-Share securities being added into MSCI’s Emerging Markets Index, which is tracked by $1.4 trillion in assets5. Each of the ETF weights in the portfolio adjust according to a proprietary approach that evaluates real-time risk and reward trade-offs. A strategic version of the model, the Krane China Growth Strategy, is also available with semi-annual rebalancing across the 3 ETFs.
About Krane ETF Model Portfolios
We construct differentiated core, strategic, and thematic model portfolios within Global, Emerging, and Chinese markets. With China playing a more critical role in the global economy, we seek to provide strategies that capture China’s importance as an essential element of a well-designed investment portfolio. We help investors stay up to date on global market trends and aim to provide meaningful diversification. Krane Funds Advisors, LLC, is a signatory of the United Nations-supported Principles for Responsible Investing (UN PRI). The firm is majority owned by China International Capital Corporation (CICC).
- “Countries with the highest number of internet users as of December 2019” Statista. Retrieved 4/30/2021
- “The 10 Largest E-commerce Markets in the World by Country” Business.com, 4/14/2020, retrieved 4/30/2021
- “Transforming The Energy System” IRENA. 2019, retrieved 4/29/2021
- Data from International Energy Agency (IEA) as of 2019, retrieved 4/29/2021
- Data from MSCI as of 12/31/2020, retrieved 3/31/2021
Krane Model Portfolios are hypothetical models for illustrative purposes only to demonstrate how certain ETFs, including KraneShares ETFs, can potentially fit into an investor’s portfolio. The model portfolios do not represent personalized investment advice or an investment recommendation by KraneShares. Financial professionals can use the model portfolios, together with other information and their own independent judgment, as a resource to help build a portfolio or to aid in the development of investment advice for their clients. The model portfolios cannot be invested in directly. The model portfolios are provided for informational purposes only and do not represent any actual account or the results of any actual trading. Model portfolio returns have many inherent limitations and may not reflect the impact that material economic and market factors may have had on the decision-making process if client funds were actually managed in the manner shown.
Investors and their financial professionals should consider the investment objectives, risks, charges and expenses of the ETFs underlying any model portfolio carefully before investing. A prospectus containing this and other information with respect to any KraneShares ETFs that are a part of a model portfolio is available at www.kraneshares.com. Investors should read the prospectus for each ETF that comprises a model portfolio carefully before investing based on a model portfolio.
Carefully consider a fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in a fund’s full and summary prospectus, which may be obtained by visiting www.kraneshares.com or Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal. There can be no assurance that a fund will achieve its stated objectives. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index. Diversification does not ensure a profit or guarantee against a loss. (R_KS)
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SOURCE Krane Funds Advisors, LLC