KraneShares, the exchange traded funds issuer known for its lineup of China-focused funds, Wednesday introduced an ETF tracking emerging markets healthcare companies.
The KraneShares Emerging Markets Healthcare Index ETF (NYSEARCA: KMED) is the newest addition to the KraneShares lineup.
“KMED is designed to track the performance of companies engaged in the healthcare sector in various emerging markets. The issuers include small-cap, mid-cap, and large-cap companies involved in biotechnology, pharmaceuticals, hospital management, healthcare management, and other sub-industries,” according to a statement from New York-based KraneShares.
The KraneShares Emerging Markets Healthcare Index ETF is the second ETF with a healthcare focus in the KraneShares stable. Earlier this year, the firm introduced the KraneShares MSCI All China Health Care Index ETF (NYSEArca: KURE).
KURE looks to reflect the performance of the MSCI China All Shares Health Care Index, which is comprised of the various China share classes from Chinese companies engaged in the healthcare sector.
Fundamentals On KMED
Some fundamental factors bode well for KMED’s potential going forward.
“By 2040, emerging market countries on average are projected to increase healthcare spending as percent of GDP by 24.4% compared to just 9.8% in developed markets over the same time period,” according to KraneShares. “Healthcare expenses now comprise the largest segment of household consumption in China, which has the second largest healthcare market globally. At the same time, healthcare expenditure as a percent of GDP lags developed markets in both China and broad emerging markets, indicating there is significant room for growth in the sector.”
KMED provides diverse exposure across multiple developing economies, but three countries loom large in the new fund. China, South Korea and India combine for nearly two-thirds of the new ETF’s geographic exposure.
For more ETF launches, visit the New ETFs category.