ETF of the Week: KraneShares MSCI All China Health Care ETF KURE

ETF Trends CEO Tom Lydon discussed the KraneShares MSCI All China Health Care Indes ETF (KURE) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.

The KraneShares MSCI All China Health Care Index ETF seeks to measure the performance of MSCI China All Shares Health Care 10/40 Index.

As the coronavirus contagion gains more considerable notoriety, Chinese investors have turned to the healthcare segment. U.S. investors can also capitalize on the momentum in Chinese healthcare stocks through this sector-specific China ETF play, KURE. KURE was among the best performing non-leveraged ETFs of the past week after China’s markets reopened, following the extended Lunar New Year holidays.

In terms of capitalizing on the coronavirus to some degree, small Chinese healthcare companies that said they were going to take action against the coronavirus rallied. It’s not just pharmaceutical or biotechs that are strengthening, healthcare companies including medical devices and other related products are also gaining on the coronavirus scare

China’s Healthcare Beginnings

Looking beyond the virus, healthcare in China is similar to healthcare in the U.S., a defensive sector play that will be in demand no matter the status of the economy. The only difference, when compared to the U.S., is that China’s healthcare market is only just beginning to develop.

That said, China is one of the fastest-growing major healthcare markets in the world, with a five-year compound annual growth rate of 11%, compared to just 4% in the United States, and -4% in Japan. China is the second-largest healthcare market globally, with total healthcare expenditure reaching $558 billion in 2016, a number projected to reach $1.1 trillion by 2020.

Related: ETF of the Week: iShares MSCI China ETF (MCHI) 

There is still an opportunity for considerable growth in China’s healthcare market with per capita health spending at just $398, compared to an average of over $6,500 for the world’s top eight healthcare markets in terms of per capita expenditure. China’s aging population, rising incomes, and increasing urbanization may provide a sustained catalyst for growth in China’s healthcare sector. Additionally, healthcare reform policies enhance the efficiency and quality of medical products.

KURE uses the KraneShares MSCI All China Health Care Index ETF, which tracks the performance of the MSCI China All Shares Health Care 10/40 Index. The index is comprised of Chinese companies engaged in the health care sector. This includes all types of publicly issued shares of Chinese issuers, which are listed in Mainland China, Hong Kong, and the United States.

Listen To Tom Lydon Discuss The KURE:

For more podcast episodes featuring Tom Lydon, visit our podcasts category.