News / Media

KraneShares Launches Active Innovation ETF Targeting China’s Growth Sectors and Private Companies

New York, N.Y. October 7, 2021 – Krane Funds Advisors, LLC (“KraneShares”), a global asset manager known for its China-focused exchange-traded funds (ETFs) and innovative China investment strategies, today announced the launch of the KraneShares China Innovation ETF (Ticker: KGRO).

KGRO is an active ETF that provides investors with core exposure to the brightest high-growth areas within China’s economy by combining “New China” sectors. These areas include China internet, healthcare, clean technology, 5G, semiconductors, and the Shanghai Stock Exchange Science and Technology Innovation Board (STAR Market). KGRO primarily invests in the following KraneShares ETFs:

  • KraneShares CSI China Internet ETF (Ticker: KWEB)
  • KraneShares MSCI All China Health Care Index ETF (Ticker: KURE)
  • KraneShares MSCI China Clean Technology Index ETF (Ticker: KGRN)
  • KraneShares CICC China 5G & Semiconductor ETF (Ticker: KFVG)
  • KraneShares SSE STAR Market 50 Index ETF (Ticker: KSTR)

KGRO may also invest up to 15% of its net assets in the securities of private companies that align with these themes or appear to be attractive opportunities, including companies preparing for an initial public offering.

“As we expand our suite of ETFs to cover multiple growth areas in China many investors have asked us for a comprehensive allocation to each of these opportunities,” said Jonathan Krane, CEO of KraneShares. “KGRO provides investors with a model portfolio of our ETFs representing what we believe to be the top growth opportunities in China, in a single ETF.”

China Innovation Highlights:

China’s internet population reached 989 million people in 2020, a penetration rate of only 70.4%.1 By comparison, the U.S. internet population reached 313 million people, a penetration rate of 85.8%.2

China budgeted $360 billion for renewable energy investments from 2017 to 20203 and plans to have renewable energy account for 35% of its electricity consumption by 20304, which may lead to tremendous growth in China’s green technology industry.

Due to global supply constraints and its strategic importance, China’s domestic semiconductor industry is becoming a major driver of innovation. China is becoming more self-sufficient in semiconductor development largely due to government policies and funding specifically for the industry. As stated in “Made in China 2025” initiative, China aims to produce 70% of the semiconductors used domestically by 2025 and have complete import substitution by 20305.

KGRO was inspired by the Krane China Innovation Strategy, a model portfolio available to financial advisors on select TAMPs (Turnkey Asset Management Platforms), for model delivery, or model implementation through Krane Model Portfolios.


Citations:

  1. CNNIC, The 47th Statistical Report on the Development of China’s Internet, 4/20/2021.
  2. Statista, “Internet usage in the United States – Statistics & Facts”, 4/29/2021.
  3. Michael Forsythe, “China Aims to Spend at Least $360 Billion on Renewable Energy by 2020”, The New York Times, 1/5/2017. Retrieved 3/31/2019.
  4. Bloomberg, “China Steps Up Its Push Into Clean Energy”, 9/26/2018, retrieved 3/31/2019.
  5. US Chamber of Commerce, “Made in China 2025: Global Ambitions Built on Local Protections”, 2017.

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