What Would A-Shares Look Like in Broad EM ETF? The Answer Already Exists

KEMP delivers A-shares exposure to investors via a 22.4% weight in the KraneShares Bosera MSCI China A ETF (NYSEArca: KBA), the lone U.S.-listed A-shares ETF that tracks an MSCI index. Coming into Tuesday, KBA was the fourth-best non-leveraged ETF in terms of 2015 percentage gains, up 45.2%.

KBA’s surge has helped drive meaningful out-performance by KEMP over VWO and the iShares MSCI Emerging Markets ETF (NYSEArca: EEM). VWO and EEM, the two biggest emerging markets ETFs, are up an average of 5.4% this year, but KEMP is up more than 10%.

KEMP’s China exposure is not limited to KBA. Overall, the ETF’s underlying index had 48.1% weight to China at the end of April, nearly double the China weight found in the FTSE Emerging Markets Index.

KEMP tracks the FTSE Emerging GDP Weighted index. The GDP-weighted index is a combination of securities from three different underlying index series:The FTSE Emerging Index, part of the FTSE Global Equity Index Series, FTSE China A Index, including A-shares and the FTSE China Overseas Index, including N-shares and S-chips, according to FTSE.

KraneShares FTSE Emerging Markets Plus ETF