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Jonathan Krane Rings the Gong at the Hong Kong Stock Exchange

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Jonathan Krane, Chief Executive Officer of Krane Funds Advisors, LLC, the investment advisor to KraneShares China-focused exchange traded funds (ETFs) rang the gong at the Hong Kong Stock Exchange to commemorate the listing of the CICC KraneShares CSI China Internet Index ETF (USD Ticker: 09186; HKD Ticker: 03186; RMB Ticker: 83186).

The listing marks the first ETF KraneShares has listed in the Hong Kong Market as well as the first fund listed together with China International Capital Corporation (CICC), a leading Chinese investment bank. The fund tracks the CSI Overseas China Internet Index, matching the benchmark and strategy of the U.S.-listed KraneShares CSI China Internet ETF (Ticker: KWEB). KWEB is listed on the New York Stock Exchange, and since 2013, has amassed $1.7 Billion in assets under management1. KraneShares will serve as the subadvisor to CICC and portfolio manager for the fund.

Jonathan Krane was joined by Lin Ning, Managing Director of CICC Hong Kong Asset Management Limited. Lin Ning commented “CICC is seeing considerable client interest and demand for a China-focused Internet ETF in the Asia market. We are excited to launch this innovative ETF on the HKEX”.

Jonthan Krane commented “KraneShares is proud to partner with CICC and expand our reach into the Hong Kong market. We believe the CICC KraneShares CSI China Internet Index ETF presents a great opportunity for investors across Asia”.

The newly launched CICC KraneShares CSI China Internet Index ETF will provide investors with exposure to Chinese Internet companies that benefit from the increasing domestic consumption within China. Key constituents include Tencent, Alibaba, Baidu, JD, Weibo, etc. The fund will be available to trade on the HKEX in three currencies which include: USD Ticker: 09186, HKD Ticker: 03186 and RMB Ticker: 83186.

China is one of the world leaders in terms of total Internet users and e-commerce sales with 721 million Internet users, comprising 21.1%2 of the global Internet population in 2016. With an Internet penetration rate of just 52.2%2, there is still considerable room for growth in China’s Internet sector. Additionally, China is the world leader in total e-commerce sales. In 2017, online sales in China reached $1.14 trillion3, or nearly 50% of the total $2.3 trillion e-commerce sales worldwide4.

About China International Capital Corporation Limited (CICC)

China International Capital Corporation Limited (CICC, 3908.HK) is China’s first joint-venture investment bank. Since inception in 1995, CICC has always been committed to providing high quality value-added financial services to our clients. We have established a full-service business model consisting of investment banking, equities, FICC, wealth management and investment management on the basis of strong research coverage. Thanks to our economic, industrial and legal expertise, as well as quality service offerings, CICC has been awarded honors such as Best Investment Bank in China, Best Sales Service Team and Most Influential Research Institution by premier publications at home and abroad. Headquartered in Beijing, we have established subsidiaries in the Chinese mainland, branch companies in major cities including Shanghai and Shenzhen, and over 200 securities branches in 28 provinces and municipalities across China. CICC has also actively ventured into overseas markets and has established subsidiaries in New York, Singapore, London and San Francisco in addition to Hong Kong. China International Capital Corporation Hong Kong Asset Management Limited, the Manager of the CICC KraneShares CSI China Internet Index ETF, is a wholly-owned subsidiary of CICC.

About Krane Funds Advisors, LLC

Krane Funds Advisors, LLC is the investment manager for the KraneShares ETFs and the sub-manager for the CICC KraneShares CSI China Internet Index ETF. Our suite of China focused ETFs provides investors with solutions to capture China’s importance as an essential element of a well-designed investment portfolio. We strive to provide innovative, first to market strategies that have been developed based on our strong partnerships and our deep knowledge of investing. We help investors stay up to date on global market trends and aim to provide meaningful diversification. Krane Funds Advisors, LLC is majority owned by CICC.

  1. Data from KraneShares as of 3/31/2018. The performance and the asset under management figure of KWEB are not those of the CICC KraneShares CSI China Internet Index ETF. KWEB is not authorized by the Securities and Futures Commission in Hong Kong and not available to the public in Hong Kong.
  2. Data from internetlivestats.com as of 31 December 2016. Retrieved on 4 April 2018.
  3. National Bureau of Statistics of China, “Total Retail Sales of Consumer Goods in December 2017”. Retrieved on 25 January 2018. Note: Figures converted from Renminbi to USD.
  4. eMarketer Report, “Worldwide Retail and Ecommerce Sales: eMarketer’s Updated Forecast and New Mcommerce Estimates for 2016—2021”. Retrieved on 29 January 2018.

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Carefully consider the Funds' investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds' full & summary prospectus, which may be obtained here: KWEB, KBA, OBOR, KGRN, KARS, KURE, KEMQ, KCNY, KFYP, KALL, KCCB, KMED, KEMX. Read the prospectus carefully before investing. Please note these links also contain the fund's current top ten holdings.

Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives. ETF shares are not redeemable with the issuing fund other than in large Creation Unit aggregations. Instead, investors must buy or sell ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling. The NAV of the Fund’s shares is calculated each day the national securities exchanges are open for trading as of the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern time (the “NAV Calculation Time”). Shares are bought and sold at market price (closing price) not NAV. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined).

The Funds are subject to political, social or economic instability within China which may cause decline in value. Variable-interest entities (VIEs) do not give investors ownership in the operating company as stock does. The enforceability of the VIE structure is not guaranteed by Chinese law. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume.

Narrowly focused investments typically exhibit higher volatility. Internet companies are subject to rapid changes in technology, worldwide competition, rapid obsolescence of products and services, loss of patent protections, evolving industry standards and frequent new product productions. Such changes may have an adverse impact on performance. Technology companies may be subject to severe competition and rapid obsolescence. The KraneShares CSI China Internet ETF, the KraneShares MSCI One Belt One Road ETF, the KraneShares CICC China Leaders 100 Index ETF, the KraneShares Emerging Markets Consumer Technology ETF, the KraneShares MSCI China Environment ETF, the KraneShares Electric Vehicles and Future Mobility Index ETF, the KraneShares MSCI All China Health Care Index ETF, the KraneShares CCBS China Corporate High Yield Bond USD Index ETF, and the KraneShares Emerging Market Healthcare Index ETF are non-diversified.

The ability of the KraneShares Bosera MSCI China A ETF, the KraneShares MSCI All China Index ETF, the KraneShares MSCI One Belt One Road ETF, the KraneShares Emerging Markets Consumer Technology ETF, the KraneShares Electric Vechicles and Future Mobility Index ETF, the KraneShares MSCI All China Health Care Index ETF, and the KraneShares Emerging Market Healthcare Index ETF to achieve their respective investment objectives is dependent, in part, on the continuous availability of A Shares and the ability to obtain, if necessary, additional A Shares quota. If a Fund is unable to obtain sufficient exposure to limited availability of A Share quota, the Fund could seek exposure to the component securities of the Underlying Index by investment in other types of securities. The funds may in invest in derivatives, which are often more volatile than other investments and may magnify the Funds’ gains or losses.

The KraneShares E Fund China Commercial Paper ETF & The KraneShares CCBS China Corporate High Yield Bond USD Index ETF are subject to interest rate risk, which is the chance that bonds will decline in value as interest rates rise. The components of the securities held by these Funds will be rated by Chinese credit rating agencies, which may use different criteria and methodology than U.S. entities or international credit rating agencies. The Fund may invest in high yield and unrated securities, whose prices are generally more sensitive to adverse economic changes and consequently more volatile. These Funds are subject to industry concentration risk and is non-diversified. Narrowly focused investments typically exhibit higher volatility.

The KraneShares CCBS China Corporate High Yield Bond USD Index ETF invests in perpetual bonds, which offer fixed return with no maturity date. Perpetual bonds can be more volatile than other types of bonds that have a maturity date and may be more sensitive to changes to interest rates.

The KraneShares CCBS China Corporate High Yield Bond USD Index ETF depends on the CIBM Program to invest directly in RMB Bonds. There is no guarantee the Fund will be able to continue to participate in the program.

The KraneShares MSCI All China Health Care Index ETF and the KraneShares Emerging Market Healthcare Index ETF invests primarily in the health care industry. The profitability of companies in the healthcare sector may be affected by government regulations and government healthcare programs, government reimbursement for medical expenses, increases or decreases in the cost of medical products and services, limited product lines, increased emphasis on the delivery of healthcare through outpatient services and product liability claims. Many healthcare companies are heavily dependent on patent protection, which may be time consuming and costly, and the expiration of a company’s patent may adversely affect that company’s profitability. Healthcare companies are subject to competitive forces that may result in pricing pressure, including price discounting, and may be thinly capitalized and susceptible to product obsolescence. Many new products in the healthcare sector require significant research and development and may be subject to regulatory approvals, which may be time consuming and costly and with no guarantee that the product will come to market.

Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index.

The KraneShares ETFs are distributed by SEI Investments Distribution Company (SIDCO), 1 Freedom Valley Drive, Oaks, PA 19456, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund.

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