On top of market volatility, this year is ratcheting up political pressure between China and the U.S. It’s little surprise that the top-performing funds from the lineup of KraneShares’ ETFs largely focus beyond China, given the macro environment.
KraneShares offers a range of ETFs that target China, the U.S., and climate strategies. The top-performing funds year-to-date reflect the guarded sentiment that U.S. investors currently exhibit towards China and a focus on portfolio diversification opportunities.
Controlling Exposure to China
The KraneShares MSCI Emerging Markets ex-China Index ETF (KEMX) offers emerging market exposure but excludes China. This allows investors to intentionally allocate how they want into China through a complementary fund. KEMX’s total returns are 5.51% YTD.
KEMX seeks to track the MSCI Emerging Markets ex-China Index. The index is a free float-adjusted, market cap-weighted index that includes large- and mid-cap companies from emerging markets, excluding Chinese issuers. Securities contained are in the top 85% of their emerging market. The fund has an expense ratio of 0.23%, with fee waivers that expire on August 1, 2023.
See more: “Augment China Exposure With This Unique EM ETF”
Diversification Through Carbon Commodities
The KraneShares California Carbon Allowance ETF (KCCA) offers targeted exposure to the joint California and Quebec carbon allowance markets. It will benefit from California’s aggressive push to reduce emissions alongside the increasing demand for allowances within the market. KCCA’s total returns are 5.34% YTD.
This market is one of the fastest-growing carbon allowance programs worldwide. Its benchmark is the IHS Markit Carbon CCA Index and includes up to 15% of the carbon credits from Quebec’s market. KDIV carries an expense ratio of 0.78%.
See more: “A Guide to Understanding the California Carbon Market”
Defensive Tilt to Pan Asian Investing
The KraneShares S&P Pan Asia Dividend Aristocrats ETF (KDIV) tracks companies that have grown their dividends sustainably over an extended time horizon in the Pan-Asia region. KDIV seeks to provide investment results that correspond to the S&P Pan Asia Dividend Aristrocrats Index. It’s up 3.31% in total returns YTD.
KDIV provides global portfolio diversification with a defensive stance against market volatility through dividend aristocrat companies. The fund offers exposure to China, Australia, Japan, and more. It’s the first ETF to apply the S&P Dividend Aristocrats strategy to the Pan-Asia area and carries an expense ratio of 0.69%.
See more: “This KraneShares Dividend Aristocrats ETF Is a Buy”
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