The KraneShares Small Cap Dividend Growers ETF (KSCD) is designed to reflect the performance of small-cap companies exhibiting a consistent track record of increasing dividend payments over a decade, thereby emphasizing quality in its selection criteria. With at least 80% of its net assets typically invested in instruments mirroring its Underlying Index, derived from the Russell 2000© Index, KSCD targets approximately 2,000 of the smallest firms in the Russell 3000© Index. Eligibility for inclusion in this index necessitates not only being a Russell 2000© component but also demonstrating a decade of uninterrupted annual dividend growth and no quarterly decrease in dividends per share. KSCD employs a quarterly rebalancing strategy, favoring securities with the highest 6- and 12-month risk-adjusted price momentum values while removing those with declining dividends. Although the Fund aims to replicate the Underlying Index, it retains the flexibility to engage in representative sampling when necessary. Additionally, up to 20% of assets may be allocated to non-index instruments deemed supportive of index tracking, including various equity securities, derivatives, and other investment vehicles. Notably, KSCD's sector concentrations align closely with those of the Underlying Index, which as of May 31, 2022, were primarily Financials, Utilities, and Industrials. Through its disciplined approach, KSCD offers investors exposure to small-cap dividend growth opportunities within a diversified portfolio framework.
The KraneShares Small Cap Dividend Growers ETF (KSCD) Dividend aims to provide investors with a reliable stream of income by focusing on small-cap companies that have consistently increased their dividend payments over a ten-year period, reflecting a commitment to quality and financial stability. As a component of KSCD's investment strategy, dividends play a crucial role in enhancing total returns for investors while also serving as a marker of company health and management confidence. By investing in firms with a proven track record of dividend growth, KSCD Dividend seeks to capture the potential for both capital appreciation and regular income generation, making it an attractive option for investors seeking a balance between growth and income within the small-cap segment of the market.
The tracking mechanism of the KraneShares Small Cap Dividend Growers ETF (KSCD) is meticulously crafted to mirror the performance of its underlying index, ensuring alignment with its investment objectives. With a primary focus on small-cap companies demonstrating consistent dividend growth over a decade, KSCD employs a strategy that typically invests at least 80% of its assets in instruments reflective of its underlying index. This index, derived from the Russell 2000© Index, undergoes rigorous quarterly rebalancing to include securities with robust price momentum while excluding those with declining dividends. KSCD remains committed to replicating the performance of its underlying index, utilizing representative sampling only when necessary to maintain tracking efficiency. Additionally, the flexibility to allocate up to 20% of assets to non-index instruments further enhances tracking precision, ensuring that KSCD delivers on its promise of providing investors with exposure to the small-cap dividend growth segment of the market. Through its meticulous tracking methodology, KSCD strives to offer investors a reliable vehicle for capitalizing on the potential returns generated by small-cap dividend growth companies.
The correlation strategy of the KraneShares Small Cap Dividend Growers ETF (KSCD) is strategically crafted to maintain alignment with its underlying index while diversifying risk. KSCD predominantly invests in small-cap companies exhibiting consistent dividend growth, a characteristic that often aligns with quality and stability. By focusing on such companies, KSCD inherently seeks to mitigate correlation risk by selecting firms with unique fundamental strengths that may not move in tandem with broader market fluctuations. Additionally, KSCD's quarterly rebalancing process, which emphasizes securities with strong price momentum while excluding those with declining dividends, further enhances its ability to manage correlation risk effectively. Moreover, the fund's flexibility to allocate a portion of its assets to non-index instruments provides additional diversification opportunities, reducing the likelihood of overreliance on correlated assets. Through its thoughtful correlation strategy, KSCD aims to offer investors exposure to the potential returns of small-cap dividend growth companies while managing correlation risk within a diversified portfolio framework.
The sector strategy of the KraneShares Small Cap Dividend Growers ETF (KSCD) is structured to capture opportunities within various industries while maintaining diversification. KSCD's investment approach targets small-cap companies with a history of consistent dividend growth over a decade, ensuring a focus on quality across sectors. As of its latest report, sector allocations within KSCD reflect the composition of its underlying index, with notable weightings in Financials, Utilities, and Industrials. This sector diversification is essential for spreading risk and capturing growth potential across different segments of the market. By investing in small-cap dividend growth companies across various sectors, KSCD seeks to provide investors with exposure to a broad range of industries while enhancing portfolio stability and potential returns over the long term.
The exposure strategy of the KraneShares Small Cap Dividend Growers ETF (KSCD) is designed to offer investors targeted access to the small-cap segment of the market, with a particular emphasis on companies demonstrating consistent dividend growth. KSCD provides exposure to a diversified portfolio of small-cap firms that have increased their dividend payments over a ten-year period, reflecting qualities of financial stability and quality management. By investing in such companies, KSCD seeks to capture the potential for both capital appreciation and regular income generation, offering investors a balanced approach to small-cap investing. Additionally, KSCD's sector diversification aligns with the composition of its underlying index, ensuring exposure across various industries while managing risk. Through its exposure strategy, KSCD aims to provide investors with a vehicle to access the potential returns of small-cap dividend growth companies within a diversified and disciplined investment framework.
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