NEW YORK, Oct. 23, 2014 /PRNewswire/ -- KraneShares and Bosera Asset Management announce KBA's transition to the new MSCI China A International Index on October 24th, 2014. KBA is the only US listed MSCI-benchmarked Exchange Traded Fund providing exposure to the mainland Chinese markets.¹
"The late October launch of the Shanghai-Hong Kong Stock Connect program will allow foreign investors to access the onshore market for the first time without Qualified Foreign Institutional Investor quota (QFII)," said Brendan Ahern, Managing Director of KraneShares "We believe the Connect program will remove investment barriers that have historically blocked index providers like MSCI from adding the onshore Chinese markets to their emerging market and global indices. With $1.3 trillion benchmarked to the MSCI Emerging Markets Index2, full inclusion of the MSCI China A International Index could see significant flows into the securities KBA owns today."3
Jonathan Krane, CEO of KraneShares, added "KBA's strategic transition to the new MSCI index allows it to hold the mainland securities slated to be owned by broad based MSCI indices ahead of their possible inclusion. In addition to the possible upgrade, the mainland market offers very inexpensive valuations."4
"We have great partners on this fund," said Brendan Ahern, "MSCI Indices have over $9 trillion of assets benchmarked to them.5 Bosera has over $32 billion in assets under management and is one of the top asset managers in mainland China.6 With MSCI and Bosera's collaboration, KBA provides investors access to the mainland markets with industry leading partners."
¹According to ETF.com and ETFtrends.com KBA is the only US listed MSCI China A ETF as of October 14, 2014.
2 There is $1.3 trillion benchmarked to the MSCI Emerging Markets Index as of March 31 2014, as reported June 2014, by eVestment, Lipper and Bloomberg.
3 According to MSCI Data as of Nov 2013, the full inclusion of China A-shares in the MSCI Emerging Markets Index could rise China's total weight from 20% to 30%.
4As of September 30, 2014 the MSCI China A Index has a Price/Earnings Ratio (P/E) of 12.56 versus MSCI All Country World Index's P/E of 17.17 and MSCI USA Index's P/E of 18.91.
5As of March 31 2014, as reported June 2014, by eVestment, Lipper and Bloomberg.
6According to Bosera data, and reported in Pensions & Investments, March 31, 2014
About KraneShares:
KraneShares, a product of Krane Funds Advisors, is focused on serving global investors with ETFs for the next-wave of China's development. Founded in 2011, our New York based firm offers proprietary ETFs constructed to give US and global investors broad, diverse and quality exposure to China's historic growth story.
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New York, NY www.kraneshares.com – info@kraneshares.com
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Carefully consider the Funds' investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds' summary or full prospectus, which may be obtained by visiting http://kraneshares.com/resources/kraneshares_kba_prospectus_2014.pdf Read the prospectus carefully before investing.
For current holdings of KBA, visit http://kraneshares.com/kba/#full_holdings
Investing involves risk, including possible loss of principal. There can be no assurance that the Fund will achieve its stated objectives. The Funds focus their investments primarily with Chinese issuers and issuers with economic ties to China. The Funds are subject to political, social or economic instability within China which may cause decline in value. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume. Current and future holdings are subject to risk.
Narrowly focused investments and investments in smaller companies typically exhibit higher volatility. Internet companies are subject to rapid changes in technology, worldwide competition, rapid obsolescence of products and services, loss of patent protections, evolving industry standards and frequent new product productions. Such changes may have an adverse impact on performance.
The ability of the KraneShares Bosera MSCI China A ETF to achieve its investment objective is dependent 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 due to the limited availability of A Share quota, the Fund could seek exposure to the component securities of the Underlying Index by investing in depositary receipts. The Fund may, in some cases, also invest in Hong Kong listed versions of the component securities and B Shares issued by the same companies that issue A Shares in the Underlying Index. The Fund may also use derivatives or invest in ETFs that provide comparable exposures. Investments in derivatives, including swap contracts and index futures in particular, may pose risks in addition to those associated with investing directly in securities or other investments, including illiquidity of the derivatives, imperfect correlations with underlying investments, lack of availability and counterparty risk. The use of swap agreements entails certain risks, which may be different from, and possibly greater than, the risks associated with investing directly in the underlying asset. The Fund, may be concentrated in the financial services sector. Those companies may be adversely impacted by many factors, including, government regulations, economic conditions, credit rating downgrades, changes in interest rates, and decreased liquidity in credit markets. This sector has experienced significant losses in the recent past, and the impact of more stringent capital requirements and of recent or future regulation on any individual financial company or on the sector as a whole cannot be predicted.
The KraneShares ETFs are distributed by SEI Investments Distribution Company, 1 Freedom Valley Drive, Oaks, PA 19456, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund.
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SOURCE KraneShares