KGRO is an actively managed fund that targets what the firm calls “New China” sectors that are anticipated to experience high-growth; these include Chinese healthcare, internet, clean technology, 5G, and semiconductors, as well as the Shanghai Stock Exchange Science and Technology Innovation Board (STAR Market).
The STAR Market is a Chinese equivalent to the Nasdaq in the US in that it is comprised primarily of tech companies that are coming to IPO or are not quite large enough or established enough yet to list on the main Chinese exchanges, which have much more stringent listing requirements.
The fund invests in the KraneShares CSI China Internet ETF (KWEB), the KraneShares MSCI All China Health Care ETF (KURE), the KraneShares MSCI China Clean Technology ETF (KGRN), the KraneShares CICC China 5G & Semiconductor ETF (KFVG), and the KraneShares SSE STAR Market 50 Index ETF (KSTR), and it also invests up to 15% of its assets in private companies that align with the investment theme.
“As we expand our suite of ETFs to cover multiple growth areas in China many investors have asked us for a comprehensive allocation to each of these opportunities,” said Jonathan Krane, CEO of KraneShares. “KGRO provides investors with a model portfolio of our ETFs representing what we believe to be the top growth opportunities in China, in a single ETF.”
KGRO’s Allocations Are in China’s Growth
The fund will seek to allocate 30% into KWEB, an ETF that tracks the CSI Overseas China Internet Index, which measures the investable universe of equities of China-based, publicly traded companies that are listed outside of mainland China and primarily involved in the internet and related sectors.
The fund will seek to allocate 25% into KURE, an ETF that tracks the MSCI China All Shares Health Care 10/40 Index, an index that measures the performance of Chinese companies in the healthcare sector.
The fund will seek to allocate 20% into KGRN, an ETF that tracks the MSCI China IMI Environment 10/40 Index, an index that contains companies involved in alternative energy, sustainable water, green building, pollution prevention, or energy efficiency in China.
The fund will seek to allocate 15% into KFVG, an ETF that tracks the CICC China Technology Leaders Index, an index that contains the 30 largest Chinese companies by free-float market cap whose business is in 5G and technology-related sectors, such as semiconductors.
The fund will seek to allocate 10% into KSTR, an ETF that tracks the SSE Star Market 50 Component Index, an index that includes the 50 largest companies by free float market cap that are listed on the SSE STAR Market.
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