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Overview

Performance

Distributions

Growth of $10,000

Holdings

Fund Documents

Overview

Investment Strategy:

The KraneShares Global Carbon Strategy ETF (KRBN) is benchmarked to the S&P Global Carbon Credit Index, which offers broad coverage of cap-and-trade carbon allowances by tracking the most traded carbon credit futures contracts. The index introduces a new measure for hedging risk and going long the price of carbon while supporting responsible investing.

Distinct from the project-based carbon offset market, compliance cap-and-trade is a government mandated & regulated, transparent, liquid market valued at nearly a trillion in 2023.1 Cap-and-trade programs, also known as Emissions Trading Systems (ETS), are a market-based approach to regulating a region’s emissions, with mandatory participation for specified industries. Supply is managed by government agencies and adjusted primarily through an annually declining cap. 

Currently, the index covers the major European and North American cap-and-trade programs: European Union Allowances (EUA), California Carbon Allowances (CCA), the Regional Greenhouse Gas Initiative (RGGI), and United Kingdom Allowances (UKA).

Global Carbon Allowance Market Highlights

  • In 2023, the four largest global carbon futures markets tracked by S&P Global Carbon Credit Index, had an annual trading volume of $754.1 billion.2
  • Cap and trade supports fuel switching and capital directed toward innovation in renewable technology.3
  • Cap-and-trade has a proven track record, where it effectively solved the acid rain crisis of the ’80s, with similar market principles now applied on a more global scale to the CO2 market.
  • KRBN is the first, largest, and most liquid publicly listed carbon allowance ETF in the world.4

KRBN Features

  • Structurally designed for long-term price appreciation due to the markets’ increasing supply scarcity5, with low correlation to other major asset classes.
  • Provides potential impact by supporting price discovery and liquidity in carbon markets.
  • Counterbalance portfolio’s emissions exposure and energy transition/climate risk.

*Formerly the KraneShares Global Carbon ETF.
**Diversification does not ensure a profit or guarantee against a loss.

1. Reuters, “Global carbon markets value hit record $909 bln last year,” Feb 7, 2023.
2. Data from Bloomberg as of 12/31/2023.
3. International Swaps and Derivatives Association, Role of Derivatives in Carbon Markets,” Sep. 2021.
4. Data from Bloomberg as of 6/30/2024.
5. European Commission, “What is the EU ETS?” retrieved 6/25/2024.

Fund Details

Data as of 10/10/2024
Ticker KRBN
Primary Exchange NYSE
CUSIP 500767678
ISIN US5007676787
Net Assets $274,229,552
Total Annual Fund Operating Expense 0.85%
Inception Date 7/29/2020
Distribution Frequency Quarterly
Underlying Index S&P Global Carbon Credit Index

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Daily Performance

Data as of 10/10/2024
Daily Net Asset Value (NAV) and Market Price
NAV $31.70
NAV Daily Change 2.76%
Market Price $31.62
Market Price Daily Change 2.16%
30 Day Median Bid/Ask Spread
0.51%
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

Cumulative %
Data as of: 09/30/2024
Fund NAV Closing Price Underlying Index
1 Month -4.41% -4.44% -4.51%
3 Month -2.18% -2.70% -1.66%
6 Month 3.24% 2.93% 4.76%
YTD -12.89% -13.24% -11.68%
Since Inception 111.33% 109.87% 119.58%
Avg Annualized %
Data as of quarter end: 09/30/2024
Fund NAV Closing Price Underlying Index
1 Year -8.99% -9.40% -8.29%
3 Year 1.12% 0.71% 2.66%
Since Inception 19.63% 19.43% 20.73%

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.

Distribution History

2024 Distributions
Ex-Date Record Date Payable Date Amount
03/26/2024 03/27/2024 03/28/2024 0.000000
06/27/2024 06/27/2024 06/28/2024 0.000000

Future calendar dates are subject to change. There is no guarantee that dividends will be paid. Past distributions are not indicative of future trends. This material is provided for educational purposes only and does not constitute investment advice.

Distributions are issued to brokers on the payable date, and are subject to broker payment schedules.

2023 Distributions
Ex-Date Record Date Payable Date Amount
06/28/2023 06/29/2023 06/30/2023 1.641497
09/27/2023 09/28/2023 09/29/2023 0.000000
12/18/2023 12/19/2023 12/20/2023 1.130139
2022 Distributions
Ex-Date Record Date Payable Date Amount
12/28/2022 12/29/2022 12/30/2022 8.355256
2021 Distributions
Ex-Date Record Date Payable Date Amount
12/29/2021 12/30/2021 12/31/2021 0.247810

Topics:

Growth of $10,000

Data as of 10/10/2024

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. Fund performance data used in this chart is based on Fund NAV and represents past performance. Past performance does not guarantee future results.

Carbon Allowance Futures

Data as of 10/11/2024
Name Identifier Position Current Exposure ($) % NAV
European Union Allowance (EUA) 2024 Future MOZ24 Comdty 2,092 147,946,943 53.96%
California Carbon Allowance (CCA) Vintage 2024 Future CDBZ24 Comdty 1,955 72,159,050 26.32%
California Carbon Allowance (CCA) Vintage 2025 Future BCYZ25 Comdty 364 14,192,360 5.18%
Regional Greenhouse Gas Initiative (RGGI) Vintage 2024 Future RJOZ24 Comdty 709 14,180,000 5.17%
European Union Allowance (EUA) 2025 Future MOZ25 Comdty 181 13,218,344 4.82%
UK Allowance (UKA) 2024 Future UKEZ4 Comdty 245 12,028,175 4.39%
273,724,873 100%

Collateral and Currency Management

Data as of 10/11/2024
Name Identifier Position Current Exposure($) % NAV
KraneShares Sustainable Ultra Short Duration Index ETF KCSH 6,254,150 157,354,414 57.39%
Euro FX Futures ECZ4 Curncy 1100 150,810,000 55%
STATE ST INST US GOV GVMXX 28,806,287 28,806,287 10.51%
BRITISH STERLING POUND GBP 8,900,000 11,636,269 4.24%
EURO EUR 10,000,000 10,944,032 3.99%
USD Cash & Equivalents** USD -85,692,304 -85,692,304 -31.25%
273,858,698 100%

Holdings, carbon allowance futures, and collateral are subject to change.
**Includes USD cash deposits & cash in margin accounts ($65,117,696), and implied short USD exposure from Euro FX futures

Carbon Allowance Futures
Breakdown

Data as of: 10/11/2024
EUA 2024 Future 54.0%
CCA 2024 Future 26.3%
CCA 2025 Future 5.2%
RGGI 2024 Future 5.2%
EUA 2025 Future 4.8%
UKA 2024 Future 4.4%

Currency Exposure
Breakdown

Data as of: 10/11/2024
EUR 59.0%
USD 36.7%
GBP 4.2%

Top 10 Holdings

Data as of 10/11/2024 Full Holdings .CSV
Rank Name % of Net Assets Ticker Identifier Type Shares Held Market Value($) Notional Value($)
1 KraneShares Sustainable Ultra Short Duration Index ETF​ 57.39% KCSH US5007673552 ETF 6,254,150 157,354,414 0
2 EURO 12.96% – – Currency 32,471,009 35,536,377 0
3 STATE ST INST US GOV 10.51% GVMXX – Money Market 28,806,287 28,806,287 0
4 Cash 9.15% – – Cash 25,096,186 25,096,186 0
5 BRITISH STERLING POUND 4.24% – – Currency 8,900,000 11,636,269 0
6 EURO 3.99% – – Currency 10,000,000 10,944,032 0
7 BRITISH STERLING POUND 1.75% – – Currency 3,673,434 4,802,816 0
8 CA CARBON ALLOW 24DEC24 0.00% CDBZ24 – Future 1,955 0 72,159,050
9 CA CARBON ALLOW 25DEC25 0.00% BCYZ25 – Future 364 0 14,192,360
10 ECX EMISSION DEC24 0.00% MOZ24 – Future 2,092 0 147,946,943

Holdings are subject to change.

Fund Documents

©2024 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 and summary prospectus, which may be obtained by visiting: www.kraneshares.com. Read the prospectus carefully before investing.

Risk Disclosures:

Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. Certain content represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice.

The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund’s 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 Fund is 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. Counterparty risk is the risk of loss in the event that the counterparty to an agreement fails to make required payments or otherwise comply with the terms of the derivative.

The Fund relies 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 the way the Fund operates, increase Fund costs and/or change the competitive landscape. New technologies may arise that may diminish or eliminate the need for cap and trade markets. Ultimately, the cost of emissions credits is determined by the cost of actually reducing emissions levels. If the price of credits becomes too high, it will be more economical for companies to develop or invest in green technologies, thereby suppressing the demand for credits. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. The use of futures contracts is subject to special risk considerations. The primary risks associated with the use of futures contracts include: (a) an imperfect correlation between the change in market value of the reference asset and the price of the futures contract; (b) possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the inability to predict correctly the direction of market prices, interest rates, currency exchange rates and other economic factors; and (e) if the Fund has insufficient cash, it may have to sell securities or financial instruments from its portfolio to meet daily variation margin requirements, which may lead to the Fund selling securities or financial instruments at a loss.

The Fund invests through a subsidiary, and is indirectly exposed to the risks associated with the 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 Fund will not receive all of the protections offered to shareholders of registered investment companies. The Fund and the Subsidiary will be considered commodity pools upon commencement of operations, and each 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.

The Fund is subject to interest rate risk, which is the chance that bonds will decline in value as interest rates rise. Narrowly focused investments typically exhibit higher volatility. The Fund’s assets are expected to be concentrated in a sector, industry, market, or group of concentrations to the extent that the Underlying Index has such concentrations. The securities or futures in that concentration could react similarly to market developments. Thus, the Fund is subject to loss due to adverse occurrences that affect that concentration. KRBN is non-diversified.

ETF 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 and KFA Funds 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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