NEW YORK, NY – August 25, 2023 – Krane Funds Advisors, LLC ("KraneShares"), an asset management firm known for its China-focused exchange-traded funds (ETFs) and innovative investment strategies, today announced the launch of the KraneShares Dynamic Emerging Markets Strategy ETF (Ticker: KEM) on the New York Stock Exchange.

KEM is designed to address evolving opportunities within the emerging markets (EM) landscape, highlighting the significance of China as a separate asset class. KEM dynamically allocates between China and Emerging Markets ex China, optimizing China exposure based on real-time signals. China and Emerging Markets ex China are represented in KEM by the KraneShares MSCI All China Index ETF (Ticker: KALL) and the KraneShares MSCI Emerging Markets ex China Index ETF (Ticker: KEMX), respectively.

"Through years of research, we discovered that investors can potentially achieve better returns by treating China as a distinct asset class within their EM portfolio. China has the world’s second-largest equity market and has shown differentiated historical performance as evidenced by its low correlation to global equity markets,” stated Jonathan Shelon, Chief Operating Officer at KraneShares. “Our goal with KEM is to provide investors a powerful tool that leverages our best thinking on how to approach investing in EM."

The investment strategy of KEM is rooted in three key pillars:

Enhanced Strategic Allocation: KEM begins with a baseline allocation that mirrors the MSCI Emerging Markets Index weightings, with China and Emerging Markets ex-China currently set at 31% and 69%, respectively.¹

Systematic Overlay and Risk Management: The allocation between China and Emerging Markets ex China is dynamically adjusted based on weighted valuation signals for the underlying fund holdings, allowing for a maximum of 30% overweight/underweight compared to the strategic allocation. Additionally, the strategy can allocate up to 10% to cash based on market conditions.

Adaptability to Market Conditions: KEM is continuously monitored and adjusted at least quarterly. Adjustments can also occur more frequently to ensure that the portfolio remains aligned with its objectives.

"The KEM ETF is based on our flagship model portfolio, the Krane Dynamic Emerging Markets Strategy, which has been running for over two years and has been performing well compared to the MSCI Emerging Markets Index,"² added Anthony Sassine, KraneShares Senior Investment Strategist. "We were able to achieve positive results through active management guided by strict rules that take a dynamic approach to China asset allocation and varying cash positions.”

For additional information on the KraneShares Dynamic Emerging Markets Strategy ETF (Ticker: KEM), visit kraneshares.com/kem or contact your financial advisor.

About Krane Funds Advisors, LLC

Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. 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 deliver innovative first-to-market strategies developed based on our strong partnerships and deep investing knowledge. We help investors stay current on global market trends and aim to provide meaningful diversification. Krane Funds Advisors, LLC, is a signatory of the United Nations-supported Principles for Responsible Investing (UN PRI). The firm is majority-owned by China International Capital Corporation (CICC).

Citations:

1. Data from MSCI as of 6/30/2023.
2. Data from Krane Model Portfolios and MSCI as of 6/30/2023.