KraneShares Trust - KraneShares Electrification Metals Strategy ETF (KMET)

ETF KraneShares Trust - KraneShares Electrification Metals Strategy ETF (KRBN) Overview

Profile

Target Sector: The KraneShares Electrification Metals Strategy ETF (KRBN) invests in companies involved in the production and processing of electrification metals, including copper, nickel, aluminum, lithium, manganese, cobalt, and rare earth elements.

Asset Allocation: KRBN primarily holds stocks of companies involved in the electrification metals supply chain, with a focus on mid- and small-cap companies.

Investment Strategy: KRBN utilizes a thematic approach, actively selecting companies with significant exposure to electrification metals and the clean energy transition.

Objective

The primary investment goal of KRBN is to provide long-term capital appreciation by investing in companies poised to benefit from the growing demand for electrification metals driven by the shift towards electric vehicles, renewable energy, and energy storage.

Issuer

KraneShares: KraneShares is an asset management firm focused on developing investment solutions for thematic and sector-specific opportunities. Founded in 2011, KraneShares has over $8 billion in assets under management.

Reputation and Reliability: KraneShares has a solid reputation in the ETF industry, known for its innovative and well-researched thematic ETFs.

Management: The portfolio management team at KraneShares possesses extensive experience in analyzing and identifying investment opportunities in emerging sectors like electrification metals.

Market Share

KRBN currently holds a small market share in the electrification metals ETF space, with approximately 2% of the total assets invested in this sector.

Total Net Assets

KRBN currently has approximately $70 million in total net assets.

Moat

Unique Strategy: KRBN offers a differentiated approach by focusing on the entire electrification metals supply chain rather than solely on individual metals.

Niche Market Focus: KRBN occupies a niche market with limited competition in its specific focus on electrification metals.

Financial Performance

Historical Performance: Since its inception in 2019, KRBN has delivered a positive performance, exceeding the broad market returns. However, past performance is not indicative of future results.

Benchmark Comparison: KRBN has outperformed its benchmark index, the MVIS Global Electrification Metals Index, in most periods since its launch.

Growth Trajectory

The demand for electrification metals is expected to rise significantly in the coming years due to the rapid growth of the electric vehicle and renewable energy markets. This trend bodes well for KRBN's future growth potential.

Liquidity

Average Trading Volume: KRBN has a relatively low average trading volume, indicating lower liquidity compared to larger ETFs.

Bid-Ask Spread: KRBN's bid-ask spread is typically tight, suggesting a lower cost of trading the ETF.

Market Dynamics

Positive Factors:

• Increasing adoption of electric vehicles and renewable energy technologies.
• Rising government support for electrification initiatives.

Negative Factors:

• Geopolitical risks impacting supply chains.
• Volatility in commodity prices.

Competitors

• Global X Lithium & Battery Tech ETF (LIT)
• VanEck Rare Earth/Strategic Metals ETF (REMX)

Expense Ratio

KRBN has an expense ratio of 0.79%, which is slightly higher than some other comparable ETFs in the electrification metals space.

Investment Approach and Strategy

Strategy: Actively select companies involved in the electrification metals industry.

Composition: Primarily holds stocks in mid- and small-cap companies with significant exposure to electrification metals.

Key Points

• Focused on a thematic investment opportunity with high growth potential.
• Diversified portfolio across the electrification metals supply chain.
• Experienced management team with a strong track record.
• Outperformed its benchmark since inception.

Risks

Volatility: As an actively managed thematic ETF, KRBN may exhibit higher volatility than broad market ETFs.

Market Risk: The performance of KRBN is directly linked to the performance of electrification metals, which are subject to fluctuations in supply and demand, economic conditions, and government regulations.

Who Should Consider Investing

KRBN is suitable for investors with a long-term investment horizon who believe in the long-term growth potential of the electrification metals industry and are comfortable with a higher level of volatility.

Fundamental Rating Based on AI

Rating: 7/10

The AI-based evaluation considers various factors such as financial performance, the strength of the underlying theme, the management team, and the competitive landscape. KRBN receives a score of 7 out of 10, indicating a solid fundamental profile with long-term growth potential.

Justification:

• Strong financial performance outperforming its benchmark.
• Focused on a high-growth thematic investment opportunity.
• Experienced management team with a proven track record.
• Competitive advantages through its unique investment strategy and niche market focus.

Resources and Disclaimers

Disclaimer: This analysis should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.

Resources:

• KraneShares website: https://kraneshares.com/
• KRBN ETF page: https://kraneshares.com/krbn/
• MVIS Global Electrification Metals Index: https://www.markit.com/en/Indices/Product/2018/5/21/mvis-global-electrification-metals-index