KraneShares Launches China Innovation ETF Targeting Growth Sectors and Private Companies
NEW YORK, Oct. 7, 2021 /PRNewswire/ -- Krane Funds Advisors, LLC ("KraneShares"), a global asset manager known for its China-focused exchange-traded funds (ETFs) and innovative China investment strategies, today announced the launch of the KraneShares China Innovation ETF (Ticker: KGRO).
KGRO is an active ETF that provides investors with core exposure to the brightest high-growth areas within China's economy by combining "New China" sectors. These areas include China internet, healthcare, clean technology, 5G, semiconductors, and the Shanghai Stock Exchange Science and Technology Innovation Board (STAR Market). KGRO primarily invests in the following KraneShares ETFs:
- KraneShares CSI China Internet ETF (Ticker: KWEB)
- KraneShares MSCI All China Health Care Index ETF (Ticker: KURE)
- KraneShares MSCI China Clean Technology Index ETF (Ticker: KGRN)
- KraneShares CICC China 5G & Semiconductor ETF (Ticker: KFVG)
- KraneShares SSE STAR Market 50 Index ETF (Ticker: KSTR)
KGRO may also invest up to 15% of its net assets in the securities of private companies that align with these themes or appear to be attractive opportunities, including companies preparing for an initial public offering.
"As we expand our suite of ETFs to cover multiple growth areas in China many investors have asked us for a comprehensive allocation to each of these opportunities," said Jonathan Krane, CEO of KraneShares. "KGRO provides investors with a model portfolio of our ETFs representing what we believe to be the top growth opportunities in China, in a single ETF."
China Innovation Highlights:
China's internet population reached 989 million people in 2020, a penetration rate of only 70.4%.1 By comparison, the U.S. internet population reached 313 million people, a penetration rate of 85.8%.2
China budgeted $360 billion for renewable energy investments from 2017 to 20203 and plans to have renewable energy account for 35% of its electricity consumption by 20304, which may lead to tremendous growth in China's clean technology industry.
Due to global supply constraints and its strategic importance, China's domestic semiconductor industry is becoming a major driver of innovation. China is becoming more self-sufficient in semiconductor development largely due to government policies and funding specifically for the industry. As stated in "Made in China 2025" initiative, China aims to produce 70% of the semiconductors used domestically by 2025 and have complete import substitution by 20305.
KGRO was inspired by the Krane China Innovation Strategy, a model portfolio available to financial advisors on select TAMPs (Turnkey Asset Management Platforms), for model delivery, or model implementation through Krane Model Portfolios.
About KraneShares
Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. Our suite of China-focused ETFs provides investors with solutions to capture China's importance as an essential element of a well-designed investment portfolio. We strive to deliver innovative, first-to-market strategies developed based on our strong partnerships and deep knowledge of investing. 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).
Citations
- CNNIC, The 47th Statistical Report on the Development of China's Internet, 4/20/2021
- Statista, "Internet usage in the United States - Statistics & Facts", 4/29/2021.
- Michael Forsythe, "China Aims to Spend at Least $360 Billion on Renewable Energy by 2020", The New York Times, 1/5/2017. Retrieved 3/31/2019.
- Bloomberg, "China Steps Up Its Push Into Clean Energy", 9/26/2018, retrieved 3/31/2019.
- US Chamber of Commerce, "Made in China 2025: Global Ambitions Built on Local Protections", 2017.
Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds' full and summary prospectus, which may be obtained by visiting www.kraneshares.com/kgro. Read the prospectus carefully before investing.
Risk Disclosures:
Investing involves risk, including possible loss of principal. There can be no assurance that the Fund will achieve its stated objectives. The Fund is subject to political, social or economic instability within China which may cause decline in value. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume.
Narrowly focused investments may be subject to higher volatility. The Fund is non-diversified.
The Fund may underperform other similar funds that do not consider conscious company/ESG guidelines when making investment decisions.
The Fund may invest in private companies that have not yet issued securities publicly in an initial public offering ("IPO") ("pre-IPO shares"). Private companies involve greater risks than investments in securities of companies that have traded publicly on an exchange for extended periods of time. Investments in these companies are generally less liquid than investments in securities issued by public companies and may be difficult for the Fund to value.
The ability of the Fund to achieve its investment objective is dependent, in part, on the continuous availability of A Shares and the ability to obtain, if necessary, additional A Shares quota. If the Fund is unable to obtain sufficient exposure to A Shares due to the limited availability of A Shares quota, the Fund could seek exposure to A Shares by investing in other types of securities, including derivatives.
The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses. A derivative (i.e. futures/forward contracts, swaps, and options) is a contract that derives its value from the performance of an underlying asset. The primary risk of derivatives is that changes in the asset's market value and the derivative may not be proportionate, and some derivatives can have the potential for unlimited losses. Derivatives are also subject to liquidity and counterparty risk.
The Fund is subject to liquidity risk, meaning that certain investments may become difficult to purchase or sell at a reasonable time and price. If a transaction for these securities is large, it may not be possible to initiate, which may cause the Fund to suffer losses.
The KraneShares ETFs are distributed by SEI Investments Distribution Company (SIDCO), which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund.
SOURCE Krane Funds Advisors, LLC
