4 min readBy Beqa Bumbeishvili ETF Insider
How does the KFVG ETF work?
The KFVG 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.
Effective September 28, 2023, Krane Funds Advisors, LLC made significant revisions to the Principal Investment Strategies of the KraneShares CICC China 5G and Semiconductor Index ETF's Prospectus. Under normal circumstances, the Fund is mandated to invest a minimum of 80% of its net assets in instruments aligning with its Underlying Index, which encompasses securities issued by 50 Chinese companies classified by Fuzzy Logix, Inc. under the Fuzzy Logic Classification System. These companies operate within various industries collectively referred to as 5G and Semiconductor-Related Industries, including Semiconductor Manufacturing, Internet and Data Services, and Application Software, among others. Notably, companies within the Application Software sector must demonstrate market leadership in artificial intelligence-based software. The Underlying Index comprises China A-Shares, along with securities listed in Hong Kong or the United States, with China as the country of domicile, provided they have an average daily traded value exceeding $1 million. Moreover, the top 50 securities by free-float market capitalization are included in the index, subject to a 10% cap on each constituent, and undergo quarterly reconstitution. During this process, individual constituent weights are adjusted to ensure no single company exceeds 10% of the index, and to maintain a balance of constituents above and below the 5% threshold. Newly listed IPOs meeting certain criteria may be added to the index prior to quarterly reconstitution. These modifications reflect Krane Funds Advisors, LLC's commitment to optimizing the Fund's performance while minimizing turnover within the Underlying Index.
The KFVG Dividend, managed by Krane Funds Advisors, LLC, offers investors a strategic avenue to capitalize on dividend-paying Chinese companies. With a focus on generating consistent income, the fund seeks to invest in a diversified portfolio of dividend-yielding securities within China's dynamic market landscape. Employing a rigorous selection process, KFVG Dividend targets companies with strong fundamentals and sustainable dividend policies, thereby providing investors with potential for long-term income growth and capital appreciation. Leveraging Krane Funds Advisors' expertise and deep understanding of the Chinese market, the KFVG Dividend aims to deliver attractive yields while managing risk effectively, offering investors a valuable opportunity to participate in the ongoing growth of China's dividend-paying sector.
The KFVG Tracking ETF, managed by Krane Funds Advisors, LLC, is designed to closely mirror the performance of a specific index or benchmark. With a commitment to transparency and efficiency, the fund utilizes sophisticated tracking techniques and investment strategies to replicate the movements of its underlying index as accurately as possible. By investing in a diverse range of securities that mirror those found in the designated benchmark, KFVG Tracking enables investors to gain exposure to targeted market segments without the need for active management. Leveraging Krane Funds Advisors' expertise and technological capabilities, the KFVG Tracking ETF aims to provide investors with a cost-effective and convenient way to access the returns of the chosen index, offering a reliable tool for portfolio diversification and risk management.
The KFVG Correlation fund, managed by Krane Funds Advisors, LLC, is designed to offer investors exposure to assets that have historically demonstrated low correlation with traditional equity and fixed-income markets. By diversifying across a range of non-traditional asset classes, such as commodities, currencies, and alternative investments, the fund seeks to reduce overall portfolio risk and enhance potential returns through enhanced diversification benefits. Employing advanced quantitative models and risk management techniques, KFVG Correlation aims to identify assets that have the potential to perform independently of broader market trends, providing investors with a valuable tool for managing portfolio volatility and achieving more consistent returns across various market conditions. Leveraging Krane Funds Advisors' expertise and research capabilities, the KFVG Correlation fund offers investors a unique opportunity to enhance their portfolio's risk-adjusted returns while minimizing overall correlation to traditional asset classes.
The KFVG Sector ETF, managed by Krane Funds Advisors, LLC, aims to provide investors with targeted exposure to specific sectors within the global market. Leveraging Krane Funds Advisors' expertise and thorough research, the fund strategically selects sectors poised for growth and allocates its assets accordingly. By focusing on sectors demonstrating strong fundamentals and favorable long-term prospects, KFVG Sector offers investors the opportunity to capitalize on sector-specific trends and opportunities. Whether investors seek exposure to technology, healthcare, consumer goods, or other sectors, KFVG Sector aims to deliver returns that reflect the performance of the selected sectors while effectively managing risk. With a commitment to transparency and investor satisfaction, KFVG Sector provides a valuable tool for building diversified portfolios tailored to investors' specific sector preferences and investment objectives.
The KFVG Exposure ETF, managed by Krane Funds Advisors, LLC, is meticulously crafted to provide investors with targeted exposure to specific markets, asset classes, or investment themes. With a focus on precision and efficiency, the fund allocates its assets across a diversified portfolio of securities that closely align with the chosen exposure objective. Whether investors seek access to emerging markets, sustainable investing themes, or alternative asset classes, KFVG Exposure leverages Krane Funds Advisors' expertise and rigorous research process to identify opportunities and construct portfolios that capture desired exposures. By offering transparency and flexibility, KFVG Exposure allows investors to tailor their portfolios to meet their unique investment goals and preferences while effectively managing risk. With a commitment to delivering value and performance, KFVG Exposure serves as a valuable tool for investors seeking targeted exposure to specific market segments or investment themes.
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