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KEUA

KraneShares European Carbon Allowance ETF

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Investment Strategy:

The KraneShares European Carbon Allowance ETF (KEUA) provides targeted exposure to the European Union Allowances (EUA) cap-and-trade carbon allowance program. KEUA is benchmarked to the IHS Markit Carbon EUA Index, which tracks the most traded EUA futures contracts. As a part of the KraneShares suite of carbon ETFs, KEUA provides a new vehicle for participating in the price of carbon and hedging risk while supporting responsible investing and ESG goals.

KEUA Features:

  • The EUA cap-and-trade program is the world's oldest and most liquid carbon allowance market. It covers approximately 40% of the EUs total emissions covering 27 EU Member States plus Iceland, Liechtenstein and Norway1.
  • The program targets reducing emissions by at least 55% of 1990 levels by 2030 and climate neutrality by 2050. The "Fit for 55" package released in 2021 set out an expansion and tightening of the program, including an increased cap reduction from 2.2% to 4.2% per year2.
  • EUA carbon allowances are among the fastest-growing, strongest performing, and diversifying asset classes. In 2021, EU carbon allowance futures have traded around $30 billion per month.3, 4
  • Can provide potential portfolio diversification due to the historically low correlation to traditional asset classes.1, 4

By pairing KEUA with other KraneShares carbon funds, investors can customize their allocation to the global carbon credit market:

  • The KraneShares Global Carbon ETF (KRBN) offers broad exposure to carbon allowances by tracking the major global cap-and-trade programs: European Union Allowances (EUA), California Carbon Allowances (CCA), and the Regional Greenhouse Gas Initiative (RGGI).
  • The KraneShares California Carbon ETF (KCCA) focuses on the California Carbon Allowances (CCA) program. The CCA program covers about 80% of California emissions, and in 2014, the program expanded to cover Quebec and its emissions.5

1. IHS Markit, 12/31/2020.
2. Europe Commission, 7/14/2021
3. Data from Bloomberg as of 8/31/2021.
4. Diversification does not ensure a profit or guarantee against a loss.
5. California Air Resources Board, 2017.

Fund Details

Data as of 10/21/2021
TickerKEUA
Primary ExchangeNYSE
CUSIP500767561
ISINUS5007675615
Net Assets$3,414,639
Total Annual Fund Operating Expense 0.79%
Inception Date10/5/2021
Distribution FrequencyAnnual

Fund Documents

Daily Performance

Data as of 10/21/2021
Premium Discount Chart
NAV
Net Asset Value$68.29 
Daily Change 0.03%
Price
Market Price $68.52 
Daily Change0.04%
30 Day Median Bid/Ask Spread
Value0%

The ETF’s 30 Day Median Bid-Ask Spread is calculated by identifying the ETF’s national best bid and national best offer ("NBBO") as of the end of each 10 second interval during each trading day of the last 30 calendar days and dividing the difference between each such bid and offer by the midpoint of the NBBO. The median of those values is identified and that value is expressed as a percentage rounded to the nearest hundredth.

Performance History

Distributions
Cumulative %
Data as of: 09/30/2021		 Fund NAV Closing Price Index
1 Month– – –
3 Month– – –
6 Month– – –
Since Inception– –
Cumulative %
Data as of quarter end: 09/30/2021		 Fund NAV Closing Price Index
Since Inception– – –
Growth of $10,000
Data as of 10/21/2021

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted.

The Growth of $10,000 chart reflects an initial investment of $10,000 on the day prior to the selected time period and assumes reinvestment of dividends and capital gains. For the growth of $10,000 chart since inception, the initial investment of $10,000 is instead made on the inception date of the Fund. Fund expenses, including management fees and other expenses were deducted. The growth of a $10,000 investment in the fund is hypothetical and for illustration purposes only.

Top 10 Holdings

Data as of 10/22/2021
Full Holdings .CSV
Rank Name % of Net Assets Ticker Identifier Type Shares Held Market Value($) Notional Value($)
1 Cash 108.94% – – Cash 3,743,243 3,743,243 0
2 EURO 0.34% – – Currency 10,000 11,646 0
3 ECX EMISSION DEC21 0.00% MOZ21 – Future 51 0 3,461,060
4 EURO FX CURR FUT DEC21 0.00% ECZ1 – Future 26 0 3,785,438
5 EURO -9.28% – – Currency -273,804 -318,885 0

Holdings are subject to change.

Related Content:

Topics

©2021 Krane Funds Advisors, LLC
280 Park Avenue, 32nd Floor, New York, NY 10017

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, KURE, KFYP, KGRN, KALL, KBND, KHYB, OBOR, KARS, KEMQ, KMED, KEMX, KESG, KFVG, KBUY, KSTR, KRBN, KTEC, KEUA, KCCA, KGRO. Read the prospectus carefully before investing. Please note these links also contain the Funds' top ten holdings, performance, and other important information.

Risk Disclosures:

Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives.

The Funds are subject to political, social or economic instability within China which may cause decline in value. 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.

The Funds may invest in derivatives, which are often more volatile than other investments and may magnify the Funds’ gains or losses. A derivative (i.e., futures/forward contracts, swaps, and options) is a contract that derives its value from the performance of an underlying asset. The primary risk of derivatives is that changes in the asset's market value and the derivative may not be proportionate, and some derivatives can have the potential for unlimited losses. Derivatives are also subject to liquidity and counterparty risk.

The Funds are subject to liquidity risk, meaning that certain investments may become difficult to purchase or sell at a reasonable time and price. If a transaction for these securities is large, it may not be possible to initiate which may cause the Fund to suffer losses.

Narrowly focused investments typically exhibit higher volatility. The Funds' assets are expected to be concentrated in an industry or group of industries to the extent that the Underlying Index concentrates in a particular industry or group of industries. The securities of companies in an industry or group of industries could react similarly to market developments. Thus, the Funds are subject to loss due to adverse occurrences that affect one industry or group of industries or sector. KWEB, KURE, KFYP, KGRN, KBND, KHYB, KMED, KESG, KFVG, KBUY, KSTR, KRBN, KTEC, KEUA, KCCA, and KGRO are non-diversified.

The ability of KBA, KALL, OBOR, KEMQ, KARS, KURE, KMED, KBUY, KSTR, KESG, KTEC and KGRO 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.

KBND and KHYB are subject to interest rate risk, which is the chance that bonds will decline in value as interest rates rise. The Funds may invest in high yield and unrated securities, whose prices are generally more sensitive to adverse economic changes and consequently more volatile. The Funds are subject to sovereign and quasi-sovereign debt risk. The governmental authority that controls sovereign and quasi-sovereign debt repayment may be unwilling or unable to repay the principal and/or interest when due.

KBND may invest in perpetual bonds, which offer fixed returns 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 components of the securities held by KBND will be rated by Chinese credit rating agencies, which may use different criteria and methodologies than U.S. entities or international credit rating agencies. KBND 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.

KBND is subject to sovereign and quasi-sovereign debt risk. The governmental authority that controls the repayment of sovereign and quasi-sovereign debt may be unwilling or unable to repay the principal and/or interest when due.

KGRN, KESG, and KGRO may underperform other similar funds that do not consider conscious company/ESG guidelines when making investment decisions.

KSTR and KTEC may invest in Initial Public Offerings (IPOs). Securities issued in IPOs have no trading history, and information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile. In addition, as the Fund increases in size, the impact of IPOs on the Fund’s performance will generally decrease.

KGRO may invest in private companies that have not yet issued securities publicly in an initial public offering ("IPO") ("pre-IPO shares"). Private companies involve greater risks than investments in securities of companies that have traded publicly on an exchange for extended periods of time. Investments in these companies are generally less liquid than investments in securities issued by public companies and may be difficult for the Fund to value.

KRBN, KEUA, and KCCA rely on the existence of cap and trade regimes. There is no assurance that cap and trade regimes will continue to exist, or that they will prove to be an effective method of reduction in GHG emissions. Changes in U.S. law and related regulations may impact how the way the Fund operates, increase Fund costs and/or change the competitive landscape. Funds may underperform other similar funds that do not consider conscious company/ESG guidelines when making investment decisions.

KRBN, KEUA, and KCCA invest through a subsidiary and are indirectly exposed to the risks associated with the respective Subsidiary’s investments. Since the Subsidiary is organized under the law of the Cayman Islands and is not registered with the SEC under the Investment Company Act of 1940, as such the Funds will not receive all of the protections offered to shareholders of registered investment companies.

KRBN, KEUA, KCCA and their subsidiaries will be considered commodity pools upon commencement of operations, and will be subject to regulation under the Commodity Exchange Act and CFTC rules. Commodity pools are subject to additional laws, regulations and enforcement policies, which may increase compliance costs and may affect the operations and performance of the Fund and the Subsidiary. Futures and other contracts may have to be liquidated at disadvantageous times or prices to prevent the Fund from exceeding any applicable position limits established by the CFTC.

The value of a commodity-linked derivative investment typically is based upon the price movements of a physical commodity and may be affected by changes in overall market movements, volatility of the Index, changes in interest rates, or factors affecting a particular industry or commodity.

Investments in non-U.S. instruments may involve risk of loss due to foreign currency fluctuations and political or economic instability. The Fund’s assets are expected to be concentrated in an industry or group of industries to the extent that the Index concentrates in a particular industry or group of industries.

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

Fund shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the Fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. The returns shown do not represent the returns you would receive if you traded shares at other times. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Beginning 12/23/2020, market price returns are based on the official closing price of an ETF share or, if the official closing price isn't available, the midpoint between the national best bid and national best offer ("NBBO") as of the time the ETF calculates the current NAV per share. Prior to that date, market price returns were based on the midpoint between the Bid and Ask price. NAVs are calculated using prices as of 4:00 PM Eastern Time.

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 Funds, or any sub-advisers for the Funds.

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