KFYP | KraneShares CICC China Leaders 100 Index ETF

KFYP ISSUER

Krane Funds Advisors, LLC (KFYP issuer) operates a fund with a strategic focus on investing in Chinese companies, primarily through China A-Shares, which are Renminbi-denominated equity securities listed on the Shanghai or Shenzhen Stock Exchanges. With an emphasis on high historical returns on equity, dividend yields, and growth in net profits, the fund aligns its investments with the constituents of its Underlying Index, meticulously selected by the index provider, China Securities Index Co., Ltd (CSI). This index comprises 100 Chinese companies meeting stringent criteria, including a minimum trading history and financial stability. The fund, which is non-diversified, may invest up to 20% of its assets in non-index instruments that the adviser deems supportive of tracking the Underlying Index. These investments could include various China-related securities like B-Shares, H-Shares, N-Shares, P-Chips, Red Chips, and S-Chips. While the fund reserves the option to replicate the Underlying Index, it typically employs representative sampling to achieve a similar investment profile. As of May 31, 2023, the Underlying Index consisted of 100 securities across various market capitalization ranges and sectors, with notable concentrations in Financials, Industrials, and Consumer Discretionary sectors. Additionally, the Fund may engage in securities lending to optimize its returns.

KFYP DIVIDEND

KFYP Dividend, managed by Krane Funds Advisors, LLC, focuses on generating income through strategic investments in Chinese companies, particularly those listed on the Shanghai or Shenzhen Stock Exchanges, known as China A-Shares. This fund adheres to a disciplined approach, emphasizing companies with a track record of high returns on equity, robust dividend yields, and consistent growth in net profits. By closely aligning its investments with the constituents of its Underlying Index, selected by the China Securities Index Co., Ltd (CSI), KFYP Dividend seeks to provide investors with reliable income streams. While the fund primarily invests in China A-Shares, it may also allocate a portion of its assets to other China-related securities, such as B-Shares, H-Shares, N-Shares, P-Chips, Red Chips, and S-Chips, within certain limits. With a non-diversified approach, KFYP Dividend may hold significant positions in sectors like Financials, Industrials, and Consumer Discretionary, as of the most recent reporting period. Additionally, the fund may engage in securities lending activities to enhance its yield potential, offering investors an opportunity for income generation within the Chinese equity market landscape.

KFYP TRACKING

KFYP Tracking, managed by Krane Funds Advisors, LLC, is designed to closely mirror the performance of its Underlying Index, which consists of 100 Chinese companies primarily listed on the Shanghai or Shenzhen Stock Exchanges, known as China A-Shares. Employing a meticulous investment strategy, the fund prioritizes companies with impressive historical returns on equity, robust dividend yields, and consistent growth in net profits, as determined by the index provider, China Securities Index Co., Ltd (CSI). KFYP Tracking aims to replicate the investment profile of the Underlying Index through a combination of direct investments in China A-Shares and representative sampling of other China-related securities, including B-Shares, H-Shares, N-Shares, P-Chips, Red Chips, and S-Chips, within predefined limits. By adhering closely to the composition and weighting of its benchmark index, KFYP Tracking provides investors with an efficient vehicle for gaining exposure to the dynamic Chinese equity market while minimizing tracking error. Additionally, the fund may engage in securities lending activities to optimize returns and enhance its ability to track the performance of the Underlying Index accurately.

KFYP CORRELATION

KFYP Correlation, managed by Krane Funds Advisors, LLC, aims to maintain a strong correlation with its designated benchmark index, comprising 100 Chinese companies predominantly listed on the Shanghai or Shenzhen Stock Exchanges, referred to as China A-Shares. Employing a meticulous investment strategy, the fund seeks to replicate the investment profile of its Underlying Index by focusing on companies with robust historical returns on equity, substantial dividend yields, and consistent growth in net profits, as identified by the index provider, China Securities Index Co., Ltd (CSI). KFYP Correlation strives to achieve this correlation through a combination of direct investments in China A-Shares and representative sampling of other China-related securities, including B-Shares, H-Shares, N-Shares, P-Chips, Red Chips, and S-Chips, within defined constraints. By closely aligning with the composition and weighting of its benchmark index, KFYP Correlation offers investors an effective tool for gaining exposure to the dynamic Chinese equity market while minimizing deviations from the benchmark's performance. Additionally, the fund may utilize securities lending strategies to enhance returns and further bolster its correlation with the Underlying Index.

KFYP SECTOR

KFYP Sector, managed by Krane Funds Advisors, LLC, focuses on capturing opportunities within specific sectors of the Chinese equity market while maintaining alignment with its designated benchmark index. The fund strategically targets sectors exhibiting potential for growth and value creation, leveraging the expertise of its investment adviser to identify compelling investment opportunities. With a disciplined approach, KFYP Sector emphasizes sectors that demonstrate promising fundamentals, robust growth prospects, and favorable market dynamics within the Chinese economy. By closely tracking the performance of its Underlying Index, which comprises 100 Chinese companies primarily listed on the Shanghai or Shenzhen Stock Exchanges, known as China A-Shares, the fund seeks to capitalize on sector-specific trends while managing sector concentration risks. Through a combination of direct investments in China A-Shares and other China-related securities, including B-Shares, H-Shares, N-Shares, P-Chips, Red Chips, and S-Chips, within specified limits, KFYP Sector offers investors targeted exposure to sectors driving the growth of the Chinese economy. Additionally, the fund may engage in securities lending activities to enhance returns and optimize sector-specific allocations, providing investors with a tailored approach to investing in Chinese sector opportunities.

KFYP EXPOSURE

KFYP Exposure, managed by Krane Funds Advisors, LLC, is designed to provide investors with diversified exposure to the Chinese equity market while aligning closely with its designated benchmark index. Leveraging a comprehensive investment strategy, the fund seeks to capture a broad spectrum of investment opportunities across various segments of the Chinese economy. By tracking the performance of its Underlying Index, comprising 100 Chinese companies predominantly listed on the Shanghai or Shenzhen Stock Exchanges, known as China A-Shares, KFYP Exposure aims to mirror the market movements and dynamics of the Chinese equity landscape. Through a combination of direct investments in China A-Shares and representative sampling of other China-related securities, including B-Shares, H-Shares, N-Shares, P-Chips, Red Chips, and S-Chips, within specified parameters, the fund offers investors a well-rounded exposure to the diverse sectors and industries driving the growth of the Chinese economy. With a focus on managing risk and optimizing returns, KFYP Exposure may also engage in securities lending activities to enhance performance and refine its exposure to different segments of the Chinese equity market, providing investors with a comprehensive investment solution tailored to the complexities of the Chinese market.