Our market update is a collaboration between the KraneShares internal research department and our industry-leading subadvisors and partners. Our research covers global growth themes in both public and private markets.
The Fund is actively managed. An actively managed fund may underperform its benchmark.
The ability of the Fund to achieve its 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 the 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.
Many Chinese companies raise capital offshore as Variable Interest Entities (VIEs), creating offshore entities—often in the Cayman Islands—that list on foreign exchanges and contract with the VIE to circumvent foreign ownership limits. Investors in these offshore entities, like the Fund, have exposure through contracts without actual ownership of the Chinese company. However, the offshore entity’s control is restricted by agreements, which can risk investment value. Moreover, the VIE structure isn’t formally recognized in China, risking government prohibition or invalidation of contracts. If these contracts become unenforceable, investors may incur losses with little recourse, and non-compliance with regulations could result in penalties for Chinese issuers.
Investing in the securities of small and medium capitalization companies involves greater risk and the possibility of greater price volatility than investing in larger capitalization companies.
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