China Five-Year Plan ETF

Ever since Mao Zedong headed the Chinese government, China has undergone a series of “Five-Year Plans” that focused on specific sector growth. Now, KraneShares launched an exchange traded fund to help investors capitalize on Beijing’s current plan.

According to a press release, the KraneShares CSI China Five-Year Plan ETF (NYSEArca: KFYP), which tries to reflect the performance of the CSI Overseas China Five-Year Plan Index, began trading Tuesday, July 23. The fund will re-allocate holdings to cover targeted growth industries based on China’s current fiscal and domestic plans, or Five-Year Plan. KFYP has a 0.68% expense ratio. [China ETFs Strengthen on Growth Pledge]

“The KraneShares CSI China Five-Year Plan ETF provides investors with an opportunity to align themselves directly with China’s current domestic investment initiatives,” Brendan Ahern, Managing Director of KraneShares, said in the press release.

Currently, KFYP holds companies in targeted sectors of China’s 12th Five-Year Plan, including technology, domestic consumption, clean energy, industrial and healthcare. The Twelfth Five Year Plan (2011-2015) focuses on increasing domestic consumption, modernizing agriculture through mechanization and improvement of agricultural service businesses; encouraging stable urbanization; promoting energy saving and environmental protection; and encouraging domestic technological innovation.

KFYP’s sector allocations include information technology 36.0%, consumer discretionary 16.6%, industrials 15.0%, consumer staples 14.6%, materials 6.4%, utilities 5.8% and healthcare 5.6%.