Earlier this month, the Nasdaq announced rule changes in regards to how small China companies go public in the United States. Once these rules are set into stone, China-based companies will now need at least $25 million to list on the exchange. It should go without saying that this will make it significantly more difficult for small China companies to go public on the Nasdaq.
This obviously may make matters difficult for China companies, but can certainly work in favor of China’s STAR Market and the companies listed there. Not only could the STAR Market serve as a potential safe haven from the Nasdaq, but China regulators continue to make it easier for companies to gain access to the exchange. For instance, back in June, China regulators unveiled a new policy that would allow the STAR Market to take on pre-profit companies.
KSTR Offers Focused STAR Market Exposure
As such, investors looking to capitalize on the Nasdaq’s rule changes might want to look at the STAR Market and the companies within its walls. The KraneShares SSE Star Market 50 Index ETF (KSTR) can offer targeted access to the equities within the STAR Market.
KSTR focuses on providing exposure to the STAR 50 Index, an index that tracks the top 50 companies within the STAR Market. The index ranks these companies based on both liquidity and market cap.
Tilting towards the STAR Market can offer more benefits than just capitalizing on macro momentum. The STAR Market offers a distinct focus on technology and science companies, helping investors gain more diversified access to the Chinese equity market. This market also contains a number of China tech unicorns that might otherwise be overlooked by a broad cap-weighted China equity ETF.
Furthermore, investors and advisors who add KSTR to their portfolio get to tap into KraneShares’ extensive experience in piloting China-focused strategies. KraneShares has a proven track record in navigating the China market through a variety of different sectors.
Thus far, KSTR has already offered incredibly potent results this year. As of August 31, 2025, the fund’s NAV has risen 40.44% year-to-date.
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