KraneShares KBA First ETF to Track MSCI China A 50 Index in the US
New York, Jan. 5, 2022 /PRNewswire/ -- Krane Funds Advisors, LLC, ("KraneShares"), an asset management firm known for its China-focused exchange-traded funds (ETFs) and innovative investment strategies, announced that KBA now tracks the MSCI China A 50 Connect Index. KraneShares updated the Fund's name to the KraneShares Bosera MSCI China A 50 Connect Index ETF (ticker: KBA) to reflect the change.
"KBA is the first MSCI-linked China A-Share ETF in the United States, and is now the first US-listed ETF to track the MSCI China A 50 Connect Index1. Since we launched KBA in 2014, we have evolved the Fund alongside MSCI based on the latest developments in the China A-share market," said Jonathan Krane, CEO of KraneShares. "We believe that we are reflecting the future of China A-share investing by tracking the MSCI China A 50 Connect Index for the KraneShares Bosera MSCI China A 50 Connect ETF (Ticker: KBA)."
On October 18, 2021, the Hong Kong Exchanges and Clearing Ltd. (HKEX) launched Futures contracts based on the MSCI China A 50 Connect Index2. These Futures contracts, designed for offshore investors, represent the first officially recognized risk management tools for Stock Connect-eligible A-shares.
"We are pleased that KraneShares will utilize the MSCI China A 50 Connect Index, which is designed to provide a diversified measure across the Chinese economy," said Christine Berg, Managing Director, Head of Americas Index Client Coverage at MSCI. "Using an innovative sector-neutral approach and based on the Stock Connect program, the Index mirrors the sector weight allocation of its parent index, the MSCI China A Index. It aims to enable investors seeking to track China's sector leaders as it represents the performance of the 50 largest securities across all Global Industry Classification Standard (GICS®) sectors."
"Through tracking the MSCI China A 50 Connect Index, KBA will focus on the largest most liquid stocks, which receive the majority of foreign interest and inflows3. Additionally, according to the Financial Times, three Mainland ETFs that track the MSCI China A 50 Connect Index saw over $4.5 billion inflows in November alone4," said Brendan Ahern, Chief Investment Officer of KraneShares. "We believe the growing demand from domestic and international investors could provide a potential catalyst for KBA."
Additional potential benefits of the MSCI China A 50 Connect Index include:
- an expected reduction in tracking error and bid-ask spreads given that market makers can directly hedge exposure with Futures.
- Greater investability from a more liquid basket of 50 names versus the nearly 600 tracked by the MSCI China A Index
- Reduced create/redeem fee for Authorized participants that transact in ETF shares in large increments known as creation / redemption units
For more information on the KraneShares Bosera MSCI China A 50 Connect ETF (Ticker: KBA), visit: https://kraneshares.com/kba
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).
Diversification does not ensure a profit or guarantee against a loss.
Carefully consider the Fund's investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund's full and summary prospectus, which may be obtained by visiting: KBA. Read the prospectus carefully before investing. Please note these links also contain the Fund's top ten holdings, performance, and other important information.
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 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. The Fund is subject to political, social or economic instability within China which may cause decline in value. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values.
The KraneShares ETFs, KFA Funds ETFs, and KraneShares Mutual Funds 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.
1 Data from Bloomberg as of 12/29/2021
2 HKEX, "HKEX Launches MSCI China A 50 Connect Index Futures", October 18, 2021.
3 Liu Kevin "Understanding China's post-pandemic new normal and long-term trends" CICC November 2021
4 Steve Johnson, "Global investors pump money into Chinese equity ETFs", Financial Times, December 19, 2021
SOURCE Krane Funds Advisors, LLC