KBA ISSUER
Krane Funds Advisors, LLC, as the issuer of the KBA ETF, follows a focused investment strategy primarily in Chinese Renminbi-denominated equity securities listed on the Shenzhen or Shanghai Stock Exchanges, known as A-Shares. The fund endeavors to mirror the performance of its Underlying Index, which selects securities based on sector weights from the MSCI China A Index. To facilitate investment in A-Shares, Krane collaborates with Bosera Asset Management, which holds a Qualified Foreign Investor license from the Chinese regulatory authority. Additionally, the fund may invest in other China-related securities, such as B-Shares, H-Shares, N-Shares, P-Chips, Red Chips, and S-Chips. While the fund aims to closely track its Underlying Index, it reserves the option to use a representative sampling strategy. With the Underlying Index comprising securities from diverse sectors, the fund's investments may reflect concentrations in specific industries, such as Financials, Industrials, and Consumer Staples. It's noteworthy that the fund may also engage in securities lending as part of its investment approach.
KBA DIVIDEND
As an exchange-traded fund (ETF) focused on Chinese Renminbi-denominated equity securities, Krane Funds Advisors, LLC's KBA ETF primarily emphasizes capital appreciation rather than dividend income. Consequently, the fund's dividend yield may not be a significant component of its investment strategy. While some of the underlying securities in the fund's portfolio may pay dividends, investors should note that KBA's investment objective centers more on tracking its Underlying Index's performance, which primarily comprises A-Shares listed on the Shenzhen or Shanghai Stock Exchanges. Given this focus, investors seeking dividend income may find other investment options more suitable to their objectives.
KBA TRACKING
Krane Funds Advisors, LLC's KBA ETF employs a robust tracking strategy to mirror the performance of its Underlying Index, which consists predominantly of large- and mid-cap Chinese Renminbi-denominated equity securities accessible through the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs. With a commitment to invest at least 80% of its net assets in securities reflecting the Underlying Index, KBA aims to closely follow the index's movements. To achieve this, the fund may utilize various instruments, including depositary receipts and derivative instruments, and collaborate with Bosera Asset Management, holding a Qualified Foreign Investor license, to navigate the intricacies of investing in A-Shares. While the fund may deviate slightly from holding all constituents of the Underlying Index, it adopts a representative sampling strategy to ensure a comparable investment profile. By closely aligning its investment approach with the Underlying Index, KBA endeavors to provide investors with effective exposure to the Chinese equity market.
KBA CORRELATION
The correlation of Krane Funds Advisors, LLC's KBA ETF with its Underlying Index is a critical aspect of its investment strategy. KBA strives to maintain a high level of correlation with its benchmark index, which primarily comprises Chinese Renminbi-denominated equity securities. By investing at least 80% of its net assets in securities reflecting the Underlying Index, KBA aims to closely track the index's performance. Additionally, the fund may utilize various instruments, including derivative instruments and depositary receipts, to further align its portfolio with the index. Through this disciplined approach, KBA seeks to minimize tracking error and provide investors with returns that closely mirror the movements of the Chinese equity market as represented by its benchmark index.
KBA SECTOR
Krane Funds Advisors, LLC's KBA ETF exhibits a sector-focused investment approach, reflecting the composition of its Underlying Index, which primarily comprises large- and mid-cap Chinese Renminbi-denominated equity securities. As of its most recent reporting, sectors such as Financials, Industrials, and Consumer Staples represent significant portions of the Underlying Index. This sector concentration indicates that KBA's portfolio may exhibit a similar sector allocation. However, the fund's investment strategy aims to closely track its benchmark index while also considering potential opportunities within other sectors. By maintaining alignment with the sector weights of its Underlying Index, KBA endeavors to provide investors with effective exposure to key sectors of the Chinese equity market while managing sector-specific risks.
KBA EXPOSURE
Krane Funds Advisors, LLC's KBA ETF offers investors exposure to the Chinese equity market through its focused investment strategy. The fund primarily invests in large- and mid-cap Chinese Renminbi-denominated equity securities listed on the Shenzhen or Shanghai Stock Exchanges, commonly referred to as A-Shares. Additionally, KBA may invest in other China-related securities such as B-Shares, H-Shares, N-Shares, P-Chips, Red Chips, and S-Chips, broadening its exposure within the Chinese market. With at least 80% of its net assets allocated to securities reflecting its Underlying Index, KBA aims to closely track the performance of this benchmark index. By providing investors with comprehensive exposure to various segments of the Chinese equity market, KBA seeks to capitalize on the potential growth opportunities offered by China's dynamic economy.
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