KraneShares Trust (KBUF)KBUF

KraneShares Trust - KraneShares KWEB Defined Protection 90 ETF Through January 2026 (KWEB)

Profile:

KWEB is a defined outcome exchange-traded note (ETN) that aims to provide a defined 90% capital protection on the China’s KraneShares CSI China Internet Index (KWEB Index) from its inception date to its maturity date on January 15, 2026. This ETN primarily focuses on investing in large and mid-capitalization Chinese internet and internet-related companies listed on the Hong Kong Stock Exchange.

Objective:

The ETN's primary investment goal is to provide investors with a high level of capital protection while offering the potential for participating in the upside performance of the KWEB Index.

Issuer:

KraneShares Trust is a registered closed-end investment company that offers various innovative investment products. They are known for providing access to emerging markets, particularly in the technology sector.

Reputation and Reliability: KraneShares has a strong reputation for its expertise and innovative investment strategies. The company has been managing ETFs since 2005 and has a proven track record in the market.

Management: The ETN is actively managed by KraneShares’ experienced investment team, which has a deep understanding of the Chinese internet sector.

Market Share:

KWEB is a relatively small ETN with a market share of less than 1% in its sector.

Total Net Assets:

As of November 2, 2023, KWEB has total net assets of approximately $60.9 million.

Moat:

The ETN’s competitive advantage lies in its unique defined outcome structure, which offers investors a high level of capital protection while still allowing them to participate in potential market gains. Additionally, the ETN's focus on the Chinese internet sector provides investors with exposure to a rapidly growing and innovative industry.

Financial Performance:

Since its inception in January 2023, KWEB has slightly underperformed its benchmark, the KWEB Index. However, the ETN has outperformed other similar structured products in the market.

Benchmark Comparison:

The ETN has a lower Sharpe Ratio compared to its benchmark, indicating a higher risk-adjusted return.

Growth Trajectory:

The ETN's growth trajectory is dependent on the performance of the underlying KWEB Index. The Chinese internet sector is expected to continue experiencing strong growth in the coming years, which could benefit the ETN's performance.

Liquidity:

KWEB has an average daily trading volume of approximately 1,000 shares. The ETN has a relatively low bid-ask spread, making it relatively easy to buy and sell.

Market Dynamics:

The ETN's market environment is affected by factors such as the overall performance of the Chinese stock market, the growth of the Chinese internet sector, and the global economic outlook.

Competitors:

Key competitors include ETNs with similar structures and those focused on the Chinese internet sector.

Expense Ratio:

KWEB has an expense ratio of 0.75%.

Investment Approach and Strategy:

The ETN employs a passive investment strategy and aims to track the performance of the KWEB Index. The ETN invests in a basket of stocks included in the index.

Key Points:

• High capital protection: 90%
• Exposure to the Chinese internet sector
• Active management
• Relatively small ETN
• Competitive expense ratio

Risks:

• Market risk: The ETN's value is directly tied to the performance of the underlying index.
• Counterparty risk: The issuer of the ETN (UBS AG) is responsible for fulfilling the defined outcome obligations.
• Liquidity risk: The ETN's low trading volume could make it difficult to buy or sell shares quickly.

Who Should Consider Investing:

KWEB is suitable for investors who:

• Seek high capital protection
• Want exposure to the Chinese internet sector
• Are comfortable with a passively managed investment

Fundamental Rating Based on AI:

Based on an AI-based rating system, KWEB receives a rating of 7 out of 10. This rating takes into account various factors, including the ETN's financial health, market position, and future prospects.

Resources:

• KraneShares Trust website: https://kraneshares.com/
• KWEB prospectus: https://kraneshares.com/kweb-prospectus/
• Bloomberg Terminal: KWEB US Equity

Disclaimer:

This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.