KraneShares has launched two new ETFs related to its flagship strategy, the KraneShares CSI China Internet ETF (KWEB). The pair take defined outcome approaches to KWEB. Defined outcome ETFs offer investors exposure to underlying securities with caps on losses, which could appeal to investors who want China exposure with certain protections.
The pair includes the KraneShares 100% KWEB Defined Outcome January 2026 ETF (KPRO) and the KraneShares 90% KWEB Defined Outcome January 2026 ETF (KBUF). The two strategies launched on the New York Stock Exchange (NYSE).
“We are seeing a record valuation disparity between the US and China and think now is the time to invest. However, as 2024 progresses, volatility persists,” said Jonathan Shelon, KraneShares COO, in a press release. “These ETFs are excellent options for investors looking for China exposure and seeking downside protection.”
Per KraneShares’ website, a defined outcome ETF looks to provide investors with upside returns based on an underlying asset with a cap, matched by a “Buffer” against decreases in the price. Defined outcome strategies use FLexible EXchange Options (Flex Options) on those underlying assets.
Defined Outcome China ETFs
KPRO looks to match KWEB’s return to a cap of 22.69% with a 100% downside buffer over a period from February 8, 2024 to January 16, 2026. KBUF, meanwhile, looks to offer a cap of 41.2% with a 90% downside buffer in that same period.
The two ETFs arrive as China investing has faced some turbulence. The country’s long-term outlook remains very strong, but the real estate debt crisis looms. That has deterred many investors from getting further into China investing.
For such a big economy, however, investors likely want some kind of allocation. That’s where this pair of defined outcome ETFs come in. Investors looking to adjust their China allocations may want to consider the duo of KPRO and KBUF.
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