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KraneShares CSI China Internet ETF (KWEB) awarded 5-star Morningstar rating

KraneShares is proud to announce that the KraneShares CSI China Internet ETF (ticker : KWEB) was awarded a five star Morningstar rating1 for its three-year performance. As of 7/31/2016, KWEB ranked #1 out of 24 exchange traded funds (ETFs) within the China Region category based on the risk-adjusted returns for the three-year period.

About Morningstar’s rating methodology

For each fund with at least a three-year history, Morningstar calculates their rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance and rewards consistent performance. The top 10% of funds in each category receive 5 stars.

KWEB was rated against 24 U.S.-domiciled China Region ETFs over the last three years. With respect to these China Region funds, KWEB received a Morningstar rating of 5 stars for the three-year period. Past performance is no guarantee of future results.

The Rise of the Chinese Consumer

“We believe KWEB’s five-star rating is a testament to the rise of the Chinese consumer, and the long term trend of ecommerce growth in China,” said Jonathan Krane, CEO of KraneShares. “Over the past three years KWEB was not only the #1 China Region ETF according to Morningstar, it also outperformed the S&P 500 index over the same time period2.”

China is undergoing a fundamental change in the composition of its economy. In 2012 China’s services sector became a greater percentage of GDP than its industrial sector3. Along with this change, retail sales have increased steadily. Total Chinese retail sales reached $4.6 trillion in 2015, an increase of 10.7% year over year4. Chinese retail websites sold $589.61 billion worth of goods in 2015, an increase of 33.3%5.

Meanwhile, compared to the United States, internet adoption in China has plenty of room to grow. Even though China has over twice as many total internet users than the United States, as of the end of 2015 the percent of its population who have access to the internet was only 51%, compared to 88% in the U.S.5

“The average three-year revenue growth rates of Chinese internet companies, like Alibaba, Baidu and Tencent are often twice that of U.S. internet companies7. At the same time we believe Chinese internet companies are trading at attractive valuations with average price to equity ratios that are at a discount to their U.S. counterparts7,” said Brendan Ahern, Chief Investment Officer at KraneShares.

“When you look at the great names that KWEB holds, factor in their impressive revenue growth rates, then take into account how reasonably priced we believe they currently are, we think holding KWEB makes a lot of sense.”

Click here to view the current quarter-ending Morningstar rating on our homepage


  1. For each fund with at least a three year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receives 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Ratings metrics. The KraneShares CSI China Internet ETF was rated against 24 U.S.-domiciled China Region funds over the last three years. With respect to these China Region funds, the KraneShares CSI China Internet ETF received a Morningstar Rating of 5 stars for the three year period. Past performance is no guarantee of future results.
  2. Data from Bloomberg as of 7/31/2016
  3. Data from Bloomberg as of 12/31/2015
  4. The National Bureau of Statistics of China “Total Retail Sales of Consumer Goods in December 2015”. 1/20/2016
  5. Frank Tong, “China’s online retail sales grow a third to $589 billion in 2015” Internetretailer.com. 1/27/2016
  6. Internet Live Stats “Internet Users by Country (2015)” accessed 8/22/2016
  7. Data from Bloomberg as of 6/30/2016. Based on comparison of top 10 holdings of KWEB compared to comparable U.S. businesses. Listed holdings weight in KWEB as of 6/30/2016: Alibaba: 9.69%, Baidu: 8.16%, Tencent: 10.97%. The Fund’s holdings are subject to change.