News / Media

A-Share Inclusion Update: KraneShares KBA ETF Moves to MSCI China A Index

NEW YORK, June 17, 2019 /PRNewswire/ — Krane Funds Advisors, LLC, (“KraneShares”) announced the benchmark for the KraneShares Bosera MSCI China A Share ETF (Ticker: KBA) has broadened its investment mandate by adopting the MSCI China A Index as of May 31, 2019.

The move occurred the same day that leading global index provider, MSCI, completed the first step of the three-step 2019 inclusion process of Shanghai and Shenzhen listed securities (A-Shares) into their Global Standard Indexes. By the end of 2019, MSCI’s definition of China will include 264 large-cap and 172 mid-cap A-Share securities, including 30 securities from the ChiNext board; increasing the inclusion factor from 5% to 20%1.

“When looking at the inclusion process, we realized that the MSCI China A Inclusion Index will converge with the MSCI China A Index following the upcoming November introduction of mid-cap securities,” said Brendan Ahern CIO of KraneShares. “By moving to track the MSCI China A Index, KBA has accelerated the three-step process into a single step, gaining full potential diversification benefits immediately.”

The MSCI China A Index captures large and mid-cap equities listed on the Shanghai and Shenzhen stock exchanges and reflects a 20% inclusion factor for China A large-cap, mid-cap, and eligible ChiNext shares2. There are a total of 436 constituents3 giving investors diverse exposure to A-Shares. Additionally, on March 11, 2019, the Hong Kong Stock Exchange announced a license agreement with MSCI to introduce futures contracts on the MSCI China A Index4 – KBA’s new benchmark. KBA has the longest track record for an MSCI-linked China A Share ETF in the United States5.

“The MSCI China A Index provides strategic exposure to the investment opportunity in Mainland China,” said Jonathan Krane CEO of KraneShares. “With $1.8 trillion6 tracking the MSCI EM Index alone, the MSCI inclusion could trigger significant institutional flows from both passive and active managers into the A-Share securities the KraneShares Bosera MSCI China A Share ETF (Ticker: KBA) holds today.”

For more information visit kraneshares.com/kba.

  1. MSCI, “MSCI Will Increase the Weight of China A Shares in MSCI Indexes”, February 28, 2019
  2. MSCI, “MSCI China A Index”, as of 06/10/2019
  3. MSCI, “MSCI China A Index”, as of 06/10/2019
  4. South China Morning Post, “Hong Kong to Launch MSCI China A Index futures for global investors to hedge against risks in Asia’s largest stock market” as of March 11, 2019
  5. Data from Morningstar as of 06/10/2019
  6. Data from MSCI as of 1/31/2019