7 min readBy Ron Koren ETF Insider
How does the KARS ETF work?
The KARS ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
Krane Funds Advisors, LLC, as the issuer of the KARS ETF, adheres to a strategic investment approach focused on the burgeoning electric vehicle (EV) industry and related sectors poised to shape the future of mobility. With a commitment to mirroring the performance of its designated benchmark, the Fund primarily allocates a minimum of 80% of its assets towards securities aligned with the Bloomberg Indices' Underlying Index. This index encompasses companies involved in electric vehicle production, EV components, energy storage technologies, autonomous navigation, lithium and copper mining, and hydrogen fuel cells. To ensure index fidelity, securities undergo rigorous eligibility criteria set by the Bloomberg Intelligence Theme-Basket committee, which utilizes a meticulous screening process. The Underlying Index, employing a modified market capitalization weighting methodology, caps the weights of top-performing securities, facilitating diversification while maintaining thematic relevance. Notably, the Fund retains flexibility, with up to 20% of assets allocated to instruments outside the Underlying Index, guided by Krane's expertise in enhancing index tracking. Although replication of the Underlying Index is an option, the Fund typically employs representative sampling, investing in a subset of securities with a similar risk-return profile. With a focus on industry concentration, the Fund mirrors the composition of the Underlying Index, which as of May 31, 2023, comprised companies predominantly in the Consumer Discretionary, Materials, and Technology sectors, with significant exposure to markets such as China, the United States, and South Korea. Additionally, the Fund engages in securities lending as part of its investment strategy.
KARS Dividend, an exchange-traded fund (ETF) managed by Krane Funds Advisors, LLC, offers investors an opportunity to participate in the burgeoning electric vehicle (EV) industry's growth while potentially benefiting from dividend income. With its strategic focus on companies engaged in EV production, EV components, energy storage technologies, and related sectors, KARS Dividend aligns with the trajectory of transformative mobility trends. By investing in securities with attractive dividend profiles within its designated benchmark, the ETF seeks to provide investors with a dual advantage: exposure to the potential capital appreciation associated with the EV sector's growth and the opportunity to earn dividends from established companies in the portfolio. As part of its investment strategy, KARS Dividend aims to deliver a blend of capital appreciation and income generation, catering to investors seeking both growth and dividend income within the dynamic EV landscape.
KARS Tracking, managed by Krane Funds Advisors, LLC, is an exchange-traded fund (ETF) designed to closely track the performance of its designated benchmark, the Bloomberg Indices' Underlying Index. With a focus on companies involved in electric vehicle (EV) production, EV components, energy storage technologies, and related sectors, KARS Tracking aims to provide investors with a reliable means of gaining exposure to the rapidly evolving EV industry. Leveraging sophisticated tracking methodologies, including representative sampling, the ETF endeavors to replicate the investment profile and returns of the Underlying Index while maintaining cost efficiency and minimizing tracking error. By meticulously monitoring market trends and adjusting its holdings accordingly, KARS Tracking seeks to deliver results closely aligned with the performance of the EV sector, offering investors a convenient and efficient way to capitalize on the transformative opportunities within this dynamic market.
KARS Correlation, under the management of Krane Funds Advisors, LLC, presents investors with a vehicle to potentially capitalize on the correlated movements of companies operating within the electric vehicle (EV) sector. By closely tracking the performance of its designated benchmark, the Bloomberg Indices' Underlying Index, KARS Correlation aims to mirror the market behavior of firms involved in EV production, components, energy storage technologies, and related sectors. This ETF leverages advanced correlation strategies to align its performance with that of the underlying index, allowing investors to potentially benefit from the synchronized movements of companies within the EV industry. With a focus on identifying and maintaining strong correlations between the fund's holdings and the benchmark, KARS Correlation offers investors an opportunity to gain exposure to the EV sector while potentially mitigating individual stock risk through diversification. Through strategic management and diligent monitoring, the ETF aims to deliver returns that closely correlate with the performance of the EV market, providing investors with a targeted approach to navigating this dynamic and rapidly evolving industry landscape.
KARS Sector, managed by Krane Funds Advisors, LLC, offers investors a specialized avenue for capitalizing on the diverse sectors within the electric vehicle (EV) industry. With a strategic focus on companies engaged in EV production, components, energy storage technologies, and related sectors, KARS Sector provides targeted exposure to specific segments poised for growth within the broader EV ecosystem. By tracking the performance of its designated benchmark, the Bloomberg Indices' Underlying Index, this exchange-traded fund (ETF) aims to capture the collective performance of companies shaping the future of mobility. KARS Sector employs a sector-specific approach, allowing investors to align their portfolios with the evolving dynamics of the EV market while potentially capitalizing on the growth potential of individual sectors such as battery technology, autonomous navigation, and raw materials supply chains. With its specialized focus and diversified holdings across key EV-related sectors, KARS Sector seeks to provide investors with a strategic tool for navigating and potentially benefiting from the transformative shifts occurring within the global automotive landscape.
KARS Exposure, managed by Krane Funds Advisors, LLC, provides investors with a targeted avenue for gaining exposure to the rapidly expanding electric vehicle (EV) industry. With a strategic focus on companies involved in EV production, components, energy storage technologies, and related sectors, KARS Exposure offers investors a comprehensive view of the burgeoning EV market. By closely tracking the performance of its designated benchmark, the Bloomberg Indices' Underlying Index, this exchange-traded fund (ETF) aims to capture the growth potential of companies driving innovation and transformation in the mobility landscape. KARS Exposure enables investors to participate in the EV sector's evolution, offering diversified exposure across various segments critical to its development, including battery technology, autonomous navigation, and raw materials supply chains. With its specialized focus and broad market coverage, KARS Exposure provides investors with a strategic vehicle for capitalizing on the long-term opportunities presented by the shift towards electric mobility.
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